The items 1, 2 and 3 here will change depending on the currently selected layer,.

1. Layer name edit field. Here you can assign a name to any layer.
2. The Opacity slider allows you to set the opacity of the currently selected. This is non-destructive and therefore can be adjusted as many times as you  need.
3. The Layer Mix modes drop down is where you set the blending mode for the current layer. See the topic on Layer Mix Modes for more details.
4. The large area of the Layers panel is where each of the up to 255 layers are accessed.
5. The Up button will move the currently selected layer up swapping places with the layer above.
6. The Down button will move the currently selected layer down, swapping places with the layer below.
7. The Insert button will create a new layer above the currently selected layer moving all other layers up.
8. The Duplicate button will make a copy of the currently selected layer and insert it above the current layer moving all other layers up.
9. The Merge button will merge the currently selected layer with the next layer below.
10. The Flatten button will merge every layer in your image together.
11. The Delete button will remove the currently selected layer.
12. With the eye icon you can make a layer visible or hidden.
13. With the lock icon you can toggle between, no lock, alpha lock and full lock. See the topic of Layer Locks for more details.
14. The thumbnail is just for reference to help identify layers.
15. The background layer is special in that it is the only layer that can have no transparency. In other words it is always at 100% opacity. If you want to work on images that will always have transparent areas such as clip art you can hide the background layer and work on layers above.
16. Notice the highlighted layer means that is the currently selected layer. All edits will be occurring on this layer.