Photoshops Elements is a 'stand alone' product. You can check out the differences between the various versions of Photoshop (and see who Adobe defines as the target markets for each product), here: http://www.adobe.com/products/photoshop/family /
They've been writing "Photoshop" for years, and it's the expensive pro program. "Photoshop Elements" is a cut-down version for the average user, though still has lots of good features.
Having recently bought a Photo Elements 5 I find it difficult to learn to use but then I do not use it a lot..I think it might be better to get the hang of Elements 5 before buying CS2 or CS3..