hi there, I've also used Publisher for marketing and promotional type products at work, but I think that if you can get past the fact that it doesn't use layers (not shure if Paint Shop uses layers?) then you should be fine. Maybe use it in the same way in which you would use PowerPoint, to insert graphics on a slide. You'll be very limited with photo-editing functionality, but maybe for a beginners class you can work around it?
Publisher is fairly flexible as far as paper sizes, you can set it to whichever dimensions you may require, so that wouldn't be a big deal ...
Or use Picasa to edit the pics and then just import into Publisher? hope this helps? good luck!
Shout if you need anything else :-)