What are Frozen Synapse's "Plan Layers" for?
Layers are used for complex pathing of a unit. Think of it like layers in Photoshop, you can divide a unit's upcoming tasks into separate layers, and you can only look at one layer at a time.
So, if you have a unit and you want to have him do a lot of pacing/backtracking in a small area, it'll be really tough to add those waypoints and commands to each of those waypoints if they're on top of each other. You can use layers to separate these out and make it a lot easier for you to see and edit those commands.
You can also filter commands in the settings/layer tool, and filter out all aim changes or the like to make it easier to see your current layer.
Added: First, make your initial waypoints and commands for your unit. Then click the wrench, and click 'new'. You'll see your current commands get grayed out, and you can add new ones. These will be added onto the end of your previous ones, but you'll only see this segment. Now, you can backtrack over your other ones without seeing a ton of green and not being able to decipher what is what.
Click 'new' for a third segment, and cycle between the segments with 'prev' and 'next'. Click 'all' to see the entire pathing. If you're in the 'all' view, just click 'prev' or 'next' to get back into the segments.
For the "Show..." window, uncheck the different boxes to not show those types of commands.