Creating Dropshadows using Layer Effects
The following drop shadow only works in Photoshop 5.
In the Layers window, right click on the layer you want dropshadowed, and select Effects...
Mode: Normal
Opacity: 75%
Angle: 120
Distance: 12
Blur: 8
Intensity: 0
Mode determines the blending method that the drop shadow will be applied with. By clicking on the black box beside the Mode dropdown, you can change the color of the dropshadow.
Opacity changes how opaque the shadow will be.
Angle points to the origin of the light, which is opposite of the way the shadow will be cast. By selecting Global Angle, it will use the universal angle for all dropshadows in the image.
Distance affects the number of pixels the dropshadow will be offset from the original position of the layer.
Blur determines the number of pixels over which the shadow will be diffused.
Intensity changes the contrast threshold of the shadow. Play around with the numbers too observe it's effect.