Photoshop CS- its the version of Photoshop you have. CS is the current one Layers are dead easy- to merge though, under the title at the top- layers there shoulld be flatten and merge visable. The DPI is dots per inch- basically, the more dots there are, the sharper the image. Most printers print 300dpi, some bublejets and stuff go upto 1200dpi or something. A4 is a standard size for paper- you may use the B system or something. Donno. http://www.paperdemon.com/storyview.php/id/1540.html Fable Spinner did a great Photoshop tutorial based on CS. HAve a looksee and see if it helps ^^
A tip with colours before you finish that- make your subject stand out- not the unimportant stuf like the background. Desaturate that background some. IT's way too powerfull at the moment