Layer Comps are a relatively new feature (introduced in CS, I believe) and are a very useful feature if you learn how to use them.
Layer Comps are another way for you to manage your layers. Instead of having to create multiple documents to see variations in a project, you can use Layer Comps to manage your project.
I start with my project of altering this photo of the Evolve Volvo S40 (evolvecars.com).
To see what your Layer Comps window looks like, go to Window > Layer Comps.
So I'm going to start working on my alterations. I add some "window tint" and change the color of the car to blue.
I like how that looks, so I'm going to save it as a Layer Comp. In my Layer Comp window, I click on the New Layer Comp Button. In the dialog window, I name my Layer Comp, check the options I want, and add a comment.
The Options are kind of obvious, but I'll explain them out a little bit.
"Visibility" will remember which Layers you had visible or not.
"Position" remember the position of each Layer.
"Appearance" will remember the settings of your Layer Styles for each Layer.
Now I want to try a different look. So I make the car red, remove the "tint", and darken the front intercooler. I like how that looks, so I create a new Layer Comp.
Now, instead of hiding and unhiding and shifting and setting different Layers to see my different variations, I can just cycle through my Layer Comps.
It's a pretty useful feature when you're trying to work on a long, involved project (unlike mine) and need to see different variations of a design. Getting in the habit of using Layer Comps will make your project less stressful and your productivity increase.
More Tutorials: 
