Need Help: Wut Tha Fucks is this?

OKy im trying to follow this tutorial as I have been inspired and am trying to do a image of my guitar from scratch...

http://www.photoshopchop.com/Photoshop_Tutorials/p2_articleid/175

but I am having trouble. What the fuck is an outer shape and an inner shape?

Edit: I have figured out each image displayed is a different layer, then when put together it is the final image. but as you notice the inner shape is more sharp, then the outer shape.

Google isn't helping either.