[sry for the double post]
Okay, I am going to make this banner:
First, hit [Ctrl+N] (new) and enter the image size (Standard=700x150). Make sure it says "pixels", and not "inches".
You should get a blank canvas. Now open the pictures you want to use in your banner, and then hit [Ctrl+A] (select) and [Ctrl+C] (copy). Then click on the blank canvas and hit [Ctrl+V] (paste). Now I have this:
With the

button, you can now move your picture around. You can paste your other picture into the canvas and then move that to the appropriate spot. Now I have this:
Now use the eraser tool (

) and erase part of your picture like this:
You can change the size of your eraser tool by clicking on the drop down arrow at the top.
