I was asked how I created the cut-out feature in the My Dork layout
http://www.designhousedigital.com/gallery/decorator-gallery/p3780-my-dork.html in the gallery ... happy to share for those that don't know how to do this technique.
There may be many different ways to achieve the cut-out look (don't ya just love digital?!), but here's how I did it.
1. Open up the template you wish to use for your basic pattern or design. I used Kate Teague's Just the Photos, Square
http://www.designhousedigital.com/kate-teague/just-the-photos-3-squares.
2. Add your solid or patterned paper (that will become the top paper in your layout, from which your photos or other elements peep through); put the paper layer as the very BOTTOM one - it should be the first thing above your Background layer.
3. Click on one of the layers in your template; select a shape that you want for a cut-out. Using the Magic Wand tool (in PSE and CS), click on the shape to select it. You should see marching ants outlining the shape.
4. Move to your paper layer (the one you added above Background), and press the delete key. You will have now created an area for a peep hole.
Repeat these steps until you have the design cut out of your background paper and then remove or hide all the layers in the template.
You should now have the Background layer with digi paper on top with shapes cut out of it. Now, it's a matter of placing photos or, as I did in my layout, pieces of patterned paper between the Background and Paper layer so they can be seen through the cut out shapes.
(I added some shadows to my page, as well, to give that extra dimension of depth).
Hope this helps.