Upload & Sell: On
Wow, that's amazing... thank you! I guess that I need to break down and purchase Photoshop eventually!
I suggest you also look at Lightroom. You can download a trial copy.
To me, LR has an easier workflow. For instance, if I take a series of photos, like your pup, and correct the color balance in one, I can easily apply that color balance to the rest of the photos taken under the same lighting conditions. A lot of the functions I did in Photoshop I now do in Lightroom.
I think it's best to own both. I take a photo up from LR into PS to do more sophisticated corrections. With PS, as AuntiPode demonstrated, you can create layers. These layers can be used for all sorts of corrections.
One nice thing about layers is that with masking, you can apply a correction to only part of the image. For instance, I've been scanning in some family negatives, some over 100 years old! There was one I was working on where the contrast on part of the right side of the negative didn't match that of the left side. If I fixed the contrast for this area overall, it would make the rest of the image too contrasty. I created a new layer with a mask so that contrast adjustments would only affect the areas not masked. I then applied the contrast just to the area that needed it. Now the entire image is correct.