I've only used Elements so can't answer all your questions. I'll get the ball rolling with the first two.
Quote:
Does elements work in layers?
What would I NOT find in elements that is useful in PS?
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Yes, Elements uses layers. But it doesn't have as many design options as PS. The thing I miss in Elements is not being able to use
all the great actions available for PS. I know that some actions can be run in Elements but it takes some doing and I haven't yet fully mastered all the required steps. There are a lot of free actions available that I'd like to be able to use but they won't work with Elements.