Adobe added a new feature in Adobe Photoshop CS2 that allows you to easily align one layer with another. When you choose View > Show > Smart Guides, Photoshop will display pink guides to indicate how the active layer aligns with the surrounding layers. They pay attention to the top, bottom, left, right and center of each layer and extend the pink guides across all the layers that are aligned. The layers will also snap to these alignment points making it especially easy to get your layers in alignment. You can toggle the snapping behavior off or on by choosing View > Snap To > Layers.
The Smart Guides will ignore Layer Styles that are applied to a layer. In the example below, the outer ring of each object was created using the Stroke and Bevel & Emboss Layer Styles, so it was not used when determining where the edge of the layer is located. The Smart Guides will also ignore any areas that have an opacity of less than 50%, which will also affect any layers that have soft edges, causing the snapping behavior to treat the halfway point of the fadeout as the edge of the layer.