cutting image on Elements 5.0

Hello there! I recently bought Photoshop Elements 5.0 for the purpose of making art layouts for CDs(cover,inserts,traycard). My question is, I would like to take a band logo and cut it to place it on the cover, on top of the background image like this,

first, template
second, background image

on top(third), band logo

I would like to cut the background out of the band logo(or whatever I don't need) and be able to use the logo by itself and place it on the background image(2nd). What is the tool to do this with Elemets 5.0? I have not been able to find it. Thanks!

Since elements doesn't have a "pen" tool you'll most likely have to do it with an eraser tool.

Double click the layer in the layer pallet to make it a floating layer, zoom in and start erasing.

Great! Thanks alot!