The Toolbox is pretty confusing and kind of overwhelming when you first look at it. What in the world are all those symbols? The good news is, once you figure out what a particular tool's function is and how it works, its icon actually makes sense and the whole thing starts to be less scary. You just need to learn one tool at a time and give yourself plenty of time to do it. We're not in a race here. Slow and steady, eh?
To state the obvious (hey, we do that a lot around here!), the Toolbox is the long skinny bar which by default should be on the left side of the Photoshop screen. Within the Toolbox are the keys to the kingdom of Photoshop. Before we learn about particular tool functions, let's just talk for a while about the Toolbox.
"The Toolbox contains selection tools, painting and editing tools, foreground - and background - color selection boxes, and viewing tools." -- Adobe Photoshop 7.0 Classroom in a Book.
The Toolbox's proportions are fixed -- you can't drag the box's sides to enlarge or shrink it. You CAN, however, click twice in its blue bar at the top to minimize it (then click twice again to maximize it.) You can use this bar to drag the Toolbox to anywhere you want it on your screen. (This picture shows what the minimized Toolbox will look like.)
The Toolbox doesn't have a red X to close it like all the other Palettes (and all files) do, but you can hide it. Hitting the "tab" key while in Photoshop hides the Toolbox and any open Palettes. Hit the "tab" key again to bring them back. (This is really nifty when you're doing close up work on an image and you don't want anything getting in your way!) You can also hide it by deselecting (unchecking) it from the file menu "Windows > Tools."
Clicking on the image at the top of the Toolbox (an eye looking to the ocean) will take you to Adobe Online where you can look for help and updates.
To get anything done in Photoshop, a tool must be selected. Once selected, that tool remains selected until you select a different tool. (There ARE keyboard shortcuts to all the tools, but we're not going to worry about that right now.)
When you select a tool, the gray bar at the top of the screen -- right below the file menu -- changes. (Click through a few tools and watch to see how the bar changes.) This is the Tool Options Bar -- each tool has it's own specific settings. With many tools, the Tool Options Bar is the FIRST place you go after selecting the tool -- to define the tool's settings before it's used. The Tool Options Bar can be hidden (or re-viewed)
from the file menu with "Window > Options."
When a tool has an arrow in the bottom right corner of its icon, that means there are more tools -- "hidden tools" -- available in the same category. Clicking quickly once on a tool selects it, but if you click on a tool and hold, the hidden tools will pop up. Once you select a hidden tool, it stays at the front as that tool's icon (and default) until another tool in that category is selected, or until Photoshop is closed.
If you have been working with a tool and things get wonky, it may be because you have changed the options too much and you need to get them back to the tool's preset. To reset the tool, we need to 
revisit the tool options bar. Whichever tool is active, that tool's icon will be displayed first thing on the left in the tool options bar. Clicking on that icon (or the arrow next to it) gives you a pop-up box. On the top right side of that box, there should be a circle with an arrow in it. Clicking on that brings out a pop-up menu -- about in the middle is the option "Reset Tool." Clicking on this will reset the tool back to the original options.
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