The Crop Tool is a great way not only to trim excess areas off of an image, but also to make multiple custom-sized square or rectangle cutouts. (So several images will match in size on a layout.)
When you select the Crop Tool, put your cursor inside your image, then click and drag to create a crop box. Inside the box shows the area to keep, and all around outside the box will be darkened -- this is the area that will be cropped out. (In the image, this is shown with the picture on the right. Your dark area will probably be gray instead of purple -- more later about how to change that!) The small boxes in the corners of the crop box allow you to drag the crop selection box to enlarge or decrease the area selected. The crop box is a lot like the marquee tool -- once a box is established, you can put your cursor inside the box and move the entire box around the image. You can also make fine-tuning adjustments with the arrow keys on the keyboard, to move the entire crop box up/down, left/right a pixel at a time. Once a crop box is active you can't do anything else -- not even zoom -- in Photoshop until you either exit out of it by hitting the "escape" key, or crop the selection with "Image > Crop" from the pull-down menu.
When you have cropped a selection, the image is changed and depending on what you're doing, you probably DON'T want to save the cropped image OVER the original image. So be careful about saving! (Choose "no" when it asks if you want to save changes.)
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(pictures on right to illustrate "practical application," two paragraphs down.) Now the COOLEST part of the Crop Tool feature is that you can TELL the crop box which dimension to make the box. In the Tool Options Bar at the top, you can designate how wide and how tall your finished image will be, 
and even what resolution to change it to during the crop process. Think ahead on this one -- if you are selecting most of a 12x12 image but figured to get it square you'd just type "1x1" in the width and height, the resulting cropped picture will ONLY be 1 inch x 1 inch. This is a literal crop -- so you need to put in the specific inches AND resolution you want. Remember -- it's easier to size DOWN than to size UP (easier to change a 10x10 to 5x5 than it is to change a 1x1 to 5x5.)
(If you have dimensions in these boxes and you have forgotten about it, you might get frustrated if you try to free-size a crop box -- it will only let your box be the dimensions specified. Just go up to the Tool Options Bar and delete the dimensions so the boxes are blank. Then you can make any kind of box you want.)
Practical application for this? If I'm m
aking a layout with several photos down the side and I know I want them all to be 2 inches by 2 inches (a perfect square), it's going to be hard to get the pictures all the same dimension by eyeballing the crop! BUT if I open all 3 pictures I'm going to use, select the Crop Tool and set the dimensions in the Tool Options Bar, I can crop each one quickly, then drag and drop each onto my layout, knowing they are all the perfect size.
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Ok, now this really has nothing to do with anything: you can change the color and opacity of the outer box (the one that lets you know which part of the image is being cut.) Once you've STARTED a crop box, the Tool Options Bar will change to give you some new options -- it's "Shield" we're talking about now. You can uncheck the box next to "Shield" to make the non-crop areas not be dark at all, all you will see in your image is a dancing ants box that looks like a normal marquee. (I don't like this option at all. I just thought I'd tell you it's there.) But what I DO like is the fact that you can change the color on the dark part! Next to "Shield" is "Color," with a box showing the current color. This is just like with Foreground/Background and the Text color tool -- just click once on the color box, and a "Color Picker" window pops up. Choose which color you want the dark area to be, then click the "Ok" button. Then next to "Color" is "Opacity." Click on the blue arrow next to the percentage number, and you'll get a slider where you can adjust how much you can see through the dark color. SO COOL.
Now an ALTERNATIVE to cropping the entire picture, is using the Marquee Tool to select the area of the image you want to drag to the layout. The Marquee Tool is a little less flexible (you can't englarge the box once you've made a selection), but you also don't have to deal with changing the image through crop, taking time to select "Image > Crop," or worry about accidentally saving over a change.
Oh wait, one more thing -- the easy keyboard shortcut for selecting the Crop Tool is "C." I often move through the Crop Tool ("C"), the Move Tool ("V"), the Marquee Tool ("M"), and the Zoom Tool ("Z") in the course of a layout. The shortcuts are all on the bottom row of the keyboard -- it saves me a lot of mouse movement and time to quickly toggle between the different tools using the keyboard shortcuts. (Just remember that the keyboard shortcuts don't work when you are using a text tool -- it will just type the letter of the key you hit. heh.)
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