Channels are actually very simple. A gray scale image has 256 shades of grey, from black through to white. If you look at a grayscale image in the channels you will see you only have a single channel. In RGB, you effectively have three grayscale channels, but each shows the amount of it's respective colour (Red, Green and Blue) - the combination of these three channels makes up the composite image. Similarly, CMYK uses four channels. You can also make up further ones to create selections and masks. If you want to see how it works, go to channels and select, say, the red channel, then open a second window showing the composite image. try erasing or painting on the red channel and observe how it affects the composite. Not easy to get this concept across in a few words, but I hope this helps.