Ok, now I do have an ancient version (version 6) so don't get mad at me. This is something I have NEVER been able to figure out and have just been working around it for some time. Simple: CUT AND PASTE! Why is it that most of my layers always have the "CUT" command grayed out?!?! Why can't I just "CUT" a layer/item?
I have opened a .JPG and dragged it into my current project. I select it, go to the edit menu and cut and copy are all grayed out.
Then I created a shape using the shape tool and I wanted to paste it into another shape. Clicked edit and once again, cut and copy are grayed out.
Also make sure your layer isn't a locked "Background" layer...if it is, double click it to make it an editable layer. And, when you want to select a layer instead of a portion of it with one of the Marquee tools, Control-click it in the Layers list.
No worries about the version...if these expensive pro applications aren't your bread & butter, it's not always wise to stay on the bleeding edge (the wallet & the brain from functionality problems & learning curves). Photoshop and similar apps are my bread & butter, but I still upgrade slowly to avoid the workflow hault that can come from initial release bugs, incompatabilites, etc.