I need help with superimposition of images in Photoshop CS5.

I have mastered the technique of superimposition but only in a limited way.

When using two images only to incorporate one above the other (superimposition) I find that the first image, that is, the one on top of the other (superimposed) retains its transparency but loses its focus. How to prevent the loss of focus?

When I select a section of a picture by the magnetic lasso tool I find that, although I can shift the selection, the space it leaves on the image is a blank space in the form of graph-paper with tiny squares. How to put another image into that blank space?

Many thanks from an elderly pensioner, ever struggling with computer navigation!.

If possible, stepbystep directions please.