1. Here's how Layers work
Layers are useful for organizing your models in large projects. That way you can place all lights on one Layer, all trees on another Layer and so on.
1.1: If you click on the [+] button you can add additional Layers up to a maximum of 20.
1.2: The Eye buttons in Build Mode allow you to show or hide Layers.
1.3: The Arrow button is used when you want to move selected models to the active Layer.
2. How does the Layer Visibility Effect work in Lumion 8 and newer versions?
Lumion 7 and older: Please see section 3 below.
2.1: The Layer Visibility Effect is available here:
Photo Mode or Movie Mode -> Add Effect -> Scene and Animation tab
2.2: In Photo Mode you can set the visibility of Layers for each Photo using the Layer Visibility Effect:
2.3: In Movie Mode, you can also animate the visibility of Layers in your Clips with the Layer Visibility Effect. Click on Create Key to add an animation Keyframe to the Clip:
3. How do the Show Layer and Hide Layer effects work in Lumion 7 and older versions?
Lumion 8 and newer: Please see section 2 above.
3.1: The Show Layer and Hide Layer Effects are available here:
Photo Mode or Movie Mode -> New Effect -> Objects tab
3.2: In Photo Mode you can set the visibility of Layers for each Photo using the Show Layer and Hide Layer Effects:
3.3: In Movie Mode, you can also animate the visibility of Layers in your Clips with the Show Layer and Hide Layer Effects:
A Show Layer Effect only shows the one Layer (plus Layer 0 for the Lumion world). You can only use one Show Layer Effect at a time.
The Hide Layer Effect can be added multiple times to a Photo or Clip, so you can hide more than one Layer at a time.
Blog article: Construction 4D phasing in Lumion 6.5 using Layers
Video Tutorial: Effects: Scene and Animation - The Layer Visibility Effect