From a longtime user of Photoshop I would say you do not want the PS app. Try Filterstorm--it is probably the closest in usage you'll find in an Ipad app to the PS experience. Snapseed from Nik is also a nice addition either to use alone or in addition to Filterstorm (which has layers believe it or not and I find it pretty decent with masking using the Jot stylus)
I am interested in the photoshop for ipad 2. but have had great success with: Photoforge2 and Photowizard. Also, Sketchbook pro is good for additional artistic capability.
Adobe Photoshop, and Adobe Photoshop Extended, with the Extended having extra 3D image creation, motion graphics editing, and advanced image analysis features.[SUP][5][/SUP] Adobe Photoshop Extended is included in all of Adobe's Creative Suite offerings except Design Standard, which includes the Adobe Photoshop edition.