The Brush pallet is at the top, below the Adobe PhotoShop logo and the File/Edit/Image... menus. To Paint in Modes, set the Mode in the Brush pallet, not the Layers pallet. In the Brush pallet, the Mode is currently Soft Light; Opacity is 100% and Flow 10%. Air Brush mode is set (pen with squiggly line, to the right of Flow). Note that in the Layers pallet Mode is Normal, with Opacity at 100% and Fill at 100%.