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This is based on a mixture of Photoshop 7 and Photoshop CS2 because the caps are from both but nothing particulary changed between the versions that should affect anything. Running from the very basics upward:

In Photoshop, select the brush tool.

At the top of the window will be the brushes toolbar. Click on the arrow next to the mini image of whichever brush you have selected to bring the menu down.

The brushes in the menu are all the basic brushes you get ready-made with Photoshop. They're useful but not so inventive and don't include any text brushes, complicated pictures, designs and so on. Clicking on the small, round arrow button at the top right corner of the menu will give you more options (under 'Replace Brushes...' will be a list of what you have to replace the standard ones) but there are still only about four different sets of brushes. However there are free brush sets all over the internet, and downloading them gives you a list more like:

I've downloaded brushes from

teh_indy,

pekeana, Annika Von Holdt who has some amazing, pretty and complicated brush sets and truly-sarah.com, among others. Deviantart is also a fantastic place to find brushes, through searching through them all can be a pain.

Once you've downloaded a brush set and opened it, you should get an icon like this:

wherever you unlocked the brush set to. Move it into Program Files > Adobe > Photoshop CS2 (or Photoshop 7.0 or whichever version you have) > Presets > Brushes. Next time you open the extended brush menu, it should show up on the list of options.

Brushes work best when you play around with them. My LJ banner has two different flowery background brushes and a whole lot of text brushes in it, though there are a lot subtler ways to use them. Once you've picked your newly installed brush set on the extended menu, the shorter menu should change to all the different brushes included in that set. Use them as you'd use the normal brushes, only they're more complicated so it's easier to get more complicated effects. For example:

There's something simple, with a couple of brushes (the flowers, simply repeated stamped over the background and then the text brush stamped once):

Or there's more complicated, with brushes from different sets layered on top of each other (these brushes are all stamped once rather than holding and dragging):

And then there are people who use brushes in very complicated ways, to make entire backgrounds and websites and do things I've never thought of. :)

A few things: brushes usually work better when they're related to the colours of the background you're using them on. It looks a little odd to have lots of different background brush colours. There are lots of exceptions to this -- designs you want to stand out etc -- but background stuff tends to work well if each brush colour is within a few shades of the others. It's also best to start a new layer:

for each new brush you use, or at least I find it is, because it lets you shift them around and adjust the opacity and such. After that it's mostly just messing around with them until you get the effect you want. :)