A Pencil document is organized in layers. There are currently four types of layers: bitmap image, vector image, sound and camera. The Time Line window at the bottom of the screen shows the existing layers. To select a layer that you want to edit, just click on it in the layer list or use the up and down arrows. You can change the layer order by dragging their name. The order affects the way image layers are displayed on top of each other; it does not affect the sound and camera layers. Layer properties, such as their name, can be changed by double-clicking on the name.
If you feel more comfortable with drawing sketches on real paper, you might want to import existing drawings in Pencil. You can import a bitmap image at a particular frame in a bitmap layer by using the Import image command in the Layer menu or you can drag and drop bitmap images from an external window onto the canvas. A key is created for each imported image.
Pencil has some elementary sound support. To add some sound, create a sound layer. Then select the Import sound command in the Layer menu and choose a sound file (only WAV format is supported on Windows; the Mac version can import any format that can be read by QuickTime). This will create a triangular key in the sound track. The key indicates where the sound will start to play. You can move this key as any other key. A sound layer does not play any sound when it is deactivated. All sounds can be turned on and off for the whole animation by pressing the sound button in the the time-line controls.
You can save your work in a specific XML format, along with a folder containing the bitmap data. This is the format currently used by Pencil to save a document. You can also export your animation as a sequence of PNG images, or as a Flash movie or a QuickTime movie (Mac OS X only).