When I select a layer, it is highlighted in grey (in the layers palette) and I am unable to edit it. My current process for making a layer editable is as follows:
I am currently running Photoshop CS5.1 on a windows machine which is using Windows 7.
Where are you clicking on the layer?
Did you try to reset your preferences by holding CTRL+ALT+Shift as soon as your start Photoshop?
I just discovered the problem. Somehow, I had entered "Quick Mask" mode. Everything is functioning normally, now.