When I use a template with multiple layers, I copy and paste each layer in a new file starting with the bottom layer and working up. Once the layers are all on the same file, I begin to fill in each layer from the bottom up. Sometimes it is helpful to only have the layer you are working on visible. When I want to fill the layer with a picture or background paper, I choose that layer in the layers palette. Then I click on the magic wand tool. I click on the shape in the LO. Then I click on the picture or the background paper in the layers palette. Then choose invert selection from the Selections Menu. With the picture or paper layer highlighted, choose cut from the Edit menu. This should cut the picture or paper to match the size of the layer. (If needed, turn down the opacity on the picture to center it on the layer before you cut.) I hope this helps!