The line tool is used to draw straight lines on the canvas. It is pretty intuitive, you simply choose the line tool from the toolbox, click once on the canvas to specify the beginning point of your line and then drag the mouse to define the line extending from the starting point.

As with the paintbrush and pencil, you have the full range of brush options and the opacity slider to modify the look of your line. However, the line tool also allows you to modify the line width with the line width textfield, the state of anti-aliasing, using the anti-alias checkbox, and whether or not you want the line to end or start with an arrow using the arrowheads checkbox. In the case of the arrowhead option, you can also modify the shape of the arrowhead by using the "Shape" button.

Try out the tool and make some lines and arrows on your canvas.

Though the line tool is pretty easy to use, it is not exactly the best way to make lines. In fact, most designers tend to use the SHIFT key instead of the line tool to get lines. To draw a straight line with any of the paint or edit tools, you should 1) click on the canvas, 2) press the SHIFT key, and 3) click on a second point on the canvas. Photoshop will draw a line between the two points you specified. Try it out.

You needn't stop with two points either. If you continue to hold the SHIFT key down and click more points on the canvas, you will add more lines connecting all the specified points. Can you make the following design without using the line tool?

You can also draw lines perpendicular to any line by holding down the mouse button while pressing the SHIFT key and dragging in a vertical or horizontal direction

Try getting the following image...