I used PhotoShop CS3! I can help... I think.
OK I'm not at my computer with my Photoshop CS3 on it, but from memory, I'll try to help you with your outlining issues and your enlarging stuff.
Good attempts even without the outlining though!
To outline:
1. Create your text layer.
2. Right click on the text layer (on the right where the thumbnails are), and choose your "blending options"... where you go to do beveling and such.
3. Check "stroke".
4. It will default to a red outline (ew).
5. Highlight the word "stroke" by clicking on it.
6. From there you can change the color of the outline (click on the red box--you can click on a color in your image to choose for the outline if your menu isn't on top of your image
) and how thick the outline is.
7. I like to stretch the text some using "Free Transform", so that I can make it thicker/wider to show more of the image beneath.
Now for changing your image size.
1. Click on your image layer that you want to change.
2. You're right to go in "Edit" --> "Free Transform". Let's see if I can help with the problem you're describing. A box will show up around your image (on that layer only).
3. The
secret is to lock the ratio on your image by clicking on the button that looks like a lock on the menu that comes up on the top of your screen.
4. From there you can either drag a corner to enlarge your image. There are so many numbers in the top menu (that bar across the top that shows up), but I like to just click on one of the boxes with a % in it (it's showing the percent of horizontal and vertical dimensions and starts at 100% for both) and up the percentage by clicking in the box and arrowing up with my keyboard.
5. Since the aspects are locked, it will change the other percent (horizontal or vertical) at the same rate keeping your image from looking wonky (in other words -- making a really fat or really skinny Mickey). When you're enlarging or reducing a figure with free transform, it will look pixilated until you "apply" the transformation.
6. I get it to let me apply my transformation by clicking the "move" tool since I typically need to move the image around once I've enlarged it.
7. A box pops up... click "apply."
8. The pixilation should disappear when it applies the transformation. If it doesn't, the image wasn't big or quality enough to be enlarged.
Make sure you're viewing in "print size" view. It helps you see if the image is actually pixilated or if it's just stretched bc you're zoomed in.
Also, I enlarge a layer at a time. I never enlarge the whole think (text and picture) as it tends to pixilate that way. You can do both at once by choosing image size (in one of the top menus). Canvas size (which I'm sure you figured out) just changes the size of the bottom/background layer... you have to stretch your image from there.
Does that help?
It took me a while playing to figure out all the tricks and there is still so much more to learn!
Are you sure you have the image layer you want clicked on (on the thumbnails to the right) when you free transform?
Joanna, If it weren't for the program being indexed as CS3 and my brother bringing it over and installing it- I would say you could be right- But... It is CS3 that I have - & it was a help as to having the correct layer selected when I am trying to edit things- 
So many things to "Duh!" about right now- The simplest things seem to be what is holding me up- I am figuring out OR finding tuts to do the harder ones...
Really, Nice job. Penny
