Blend modes are really powerful and easy to use. You just need to understand a few concepts.
One of the best ways I know to explain blend modes is through a demonstration, but before we really get into the demo, let me explain a little about how the blend modes are categorized. The first category starts with Normal which means that there's not a lot of blending. In fact, when the Normal mode is selected there is no blending. The Dissolve mode is also in this category and really doesn't blend much but just adds a little dissolving technique around areas of contrast. Don't think I have ever used this but it may work for something you need so now you know what it is.
Below the normal category are the two most used categories. They start with the "Darken" and "Lighten" modes and they work pretty much in that way. The Darken modes will blend only the dark areas and the Lighten modes will blend only the light areas. I'll show you how this works in a moment. The other modes below these two categories are not used as often, at least by me, so I will save them for another day.
Since the Darken and Lighten categories are the most common I will focus on them for the demo. However, you should try all of the blend modes to see how they work. One of the other modes may be exactly the look you're looking for.
To demo how the Darken and Lighten modes work please open Photoshop. In Photoshop you need to create a new document, then fill it with White. Now in the middle of the document create a large box with your Marquee tool and fill it with Black. Finally, create another smaller box inside the black one, again with the Marquee tool, and fill it with 50% Gray. When you're done it should look something like this:
Next, add a new layer to the document. On this layer you need to paste something (texture, image, etc.) that we can blend into the layer below (the black, white, and gray boxes). It should include a broad tonal range so there are lots of blacks, whites, and middle grays. Here's a good texture
you can download for this demo if you want to follow along.
Once the texture is added to the new layer you will not be able to see the layer with the boxes until we select a blending mode. Now while on the new texture layer select the Darken blending mode. Notice that the texture does not blend with the black area of the layer below it but only with the white and gray areas . That's because only the parts of the texture that are 50% gray and lighter are affected by the Darken blending mode. Think of it this way. The Darken modes can only make things darker. Now change the blending mode to Lighten. This mode will only blend the texture on the areas of the box that are 50% gray and darker. Again, think of it this way. The Lighten blending modes can only lighten areas. So to summarize, all blend modes in the Darken category will only darken areas in the layer below. Conversely all blend modes in the Lighten category will only lighten areas of the layer below. Each blend mode in these two categories affects the associated same blacks and whites, just in different ways. Try them all to see their differences. Notice that both of these affect 50% gray.
So what does this mean to you? Blend modes are a good way to apply some texture to your images. How you want that texture applied is where the differences come into play. For example, if you want the texture to be prominent in the image you would probably want it to be applied with a Darken blending mode so the darker areas are applied. This would apply the texture to only the lighter parts of the image below. Multiply is one of the Darken modes that is very popular. The opposite of this would be Screen that applies the texture to only the darker tones of the image.
Not only can you use these in applying textures to you images, but some of the tools on the toolbar allow you to apply them with blend modes. For example, the Brush tool allows you to apply a foreground color to the image. If you want that color to only have the ability to lighten an area you can select a blend mode, in the properties bar, in the Lighten category. If you do this with the opacity and/or the flow turned down, your retouching can be much improved.
If all of this is bending your mind too much there's an easy way to determine which blend mode to use. Select the move tool in the Tool bar. Press the Shift key and hold it down. Now press the '+' key to toggle through the blend modes (the '-' key goes in reverse). When you find one you like stop and continue with the rest of your retouching.
If you're not using blend modes you're missing out on some really cool stuff.