Now, a quick step-by-step with PSX:

1. Download and prepare some images (possibly using ImageToolX to aid in the preparation of the images)
2. Start PSX
3. From the "PhotoSceneryX" menu, click "Paths" and set the DSFTool path (select the DSFTool.exe file (Windows, Linux) or the DSFTool file (OSX)) and the 7-zip path
4. Click "License" and "Accept"
5. If you've purchased, click "Registration" and register PSX.
6. Click "X-Plane Path" and select the base X-Plane installation folder, i.e. "C:\Games\X-Plane" or "/home/yourusername/games/xplane"
7. Enter a scenery name, preferably with no spaces (just good practice)
8. Enter the number of images you have from West to East (the number you're left with AFTER being processed by ITX (or manually) and ready to go into PSX/X-Plane)
9. Enter the number of images you have from South to North (the number you're left with AFTER being processed by ITX (or manually) and ready to go into PSX/X-Plane)
10. Enter the Image # Start numbers: Typically you'll leave both of these as "1" unless you added a New Block
11. If you know the coordinates of the entire area covered by your processed and ready images, select ENTIRE AREA and enter the coordinates. Otherwise select you need to know the coordinates of the processed and ready SOUTHWESTERN IMAGE (ITX will tell you this when it finishes) and enter them.
12. Select the method. You should almost always use Method 1 - New Mesh.
13. Select the X-Plane version.
14. Select the pixel size of your processed and ready images (they should be square, again ITX does this).
15. If you're adding scenery to an area you've already worked on, select New Block. Otherwise, leave it unchecked.
16. Use Overlays: check this if you want to put your images on top of and in addition to the default X-Plane terrain images. You'll almost always want to leave this UNCHECKED.
17. Select the type of processed and ready images you're using.
18. Layer group and Layer offset apply only to Method 2. Read the PSX documentation.
19. Level of Detail: Typically leave these numbers as they are. If you change this and you don't know what you're doing, your scenery might disappear when you don't want it to. Read up on Level of Detail in the PSX docs and the X-Plane scenery library docs.
20. If you want your images to cover the default X-Plane water, check Cover Water.
21. If you have created or downloaded night (LIT) textures, check the LIT textures box.
22. Save the input to a file.
23. Click "Generate X-Plane Files" and wait for your scenery to be generated.
24. Once PSX is finished, put your images inside the textures folder created by PSX, i.e. C:\Games\X-Plane\Custom Scenery\[scenery name]\textures.
25. Start up X-Plane and enjoy!

I hope this helps!

Justin