The most common thing you will want to do with channels is to
insert an Alpha Channel. Because the Alpha value specifies how
transparent the image is you can then use this to perform blends
and mattes when drawing onto other images.
Generally you start with two images. One contains the picture
and the other contains the Alpha Channel. You can then insert the
Alpha Channel into the picture.
To make use of the Alpha channel you must draw in transparent
mode otherwise it will be ignored. You can combine two pictures
with alpha channels using this mode but in general you normally
want to just combine one picture with another using the Alpha
channel as a matte.
Sometimes you will hear alpha channels referred to as masks or
mattes. Typically a mask or a matte is a reduced quality alpha
channel containing only 0 or 100% opacity values.