1. Be sure you have the right software. She's talking about Photoshop. Make sure you have Photoshop, not Photoshop Elements.
2. When you do a save as from Photoshop PSD is the main choice. That's a Photoshop file. But you need to understand how to see the actual file type in your system.
3. What does "did not work" actually mean? So many things can go wrong, you see...
PSD stands for Photoshop Document, the native Photoshop file format. If you have a graphic or image open in Photoshop you can use Save As to select from the Format drop-down menu various formats, such as JPG (as well as PSD, which is the first item in the list and has the name Photoshop, but will have the PSD suffix when you save the file in that format).
If you produce a Photoshop file with Layers, such as one having a Photograph and another with lettering, you can flatten it (merge) it for distribution. But always save it as a copy so you can go back to your original layered file to make further changes. (When you flatten an image you can't make changes to individual layers any more).
The resolution of an image is measured in pixels per inch (PPI) although some people, mistaken in this context, use the term DPI (Dots per Inch). 150PPI means you have in your image 150 pixels – Pixel Elements (or whatever resolution you've selected ) in a line in one inch. So for example if you had an image that was 1200 pixels wide, by 600 px deep at 150PPI it would print an image 8 inches x 4 inches. The rule of thumb for images that are to be printed on coated paper for magazines and books etc, on commercial litho presses is 300PPI
If you're creating a large banner that's to be viewed from a distance you may not need to have a resolution as high as 150PPI. What is the trimmed size of your banner?