To explain it all fully would take a long time and a lot of words and, as it sounds like you're getting into Elements in a big way, you'd be better off getting a good book about PSE8, like Scott Kelby and Matt Kloskowski's "Photoshop Elements 8 for Digital Photographers" - good value book.
You'll need to learn a few basics - Cut, Copy and Paste - Layers - Blur Tool - Layer Masks. And you have to try to get the replacement images (the new heads) photographed in a very similar light or else you'll be at it for days trying to make it realistic. (Have you noticed that even the TV companies can't get a decent job done when they try to show one of the characters in an old picture?).
In very simple terms, you need the three images open - the original group and the two other faces. This will work better if they are all at the same resolution - so check the ppi in the Resize dialog. You need to make a selection of each face, as carefully as possible, make a copy of that selection, then paste it onto the group shot (it doesn't matter where just yet). The new face will appear as a new layer - which can be resized, moved, rotated etc and generally manoeuvred into place. Then you'll notice that the light is totally different! So you need to do some editing to try to get the same lighting effect on the face. If you get that right, you can use a Layer Mask (again, not an easy thing to do in Elements) to erase any unwanted bits of the face then finally the blur tool to smooth the edges. Then, if you're not fed up yet, the same with the other face.
Flickr has a group called
"Fix my Pic"....... and the kindly folk on there will actually do it for you - just for fun!
