How To Edit a Layer Image?

Excuse my ignorance, please. I have CS3 but I rarely use it and know little.

Now I been asked to make montages. So I've used that auto merge thing to get a montage of pics selected from my hard drive all onto one 'sheet of paper' so to speak - one photoshop 'image' ? (It is not clear to me if that is the 'image' or if the individual pics comprising it are the 'image' ).

And I can use 'free transform' to move them around and make a pleasing montage.

Except some of the pics obviously need some cropping and some others would benefit by have the subject 'cut out' from the background.

I can do both these things when I have a pic newly brought into photoshop and stuck there on its own canvas.

But I can't find how to do it with a selected pic from this montage.

Doubtless right under my nose, I know... but I'm going squinty eyed looking and still can't get it.... can/will anyone help?

if you can't Cut or use the eraser on the Layer, you may have a "Smart Object Layer",
it goes like this icon:
 Untitled-1.jpg   10.54KB   200 downloads

to edit it, just double press the icon.
or you can make a "mask" linked to the layer and use the Brush on the mask to delete part of the image.

hope this help
(if not, please feel free to ask).