How After Effects imports layered files (6.5)

When you import a layered Photoshop or Illustrator file into an After Effects project, you have the choice to import the file as footage or as a composition.

When you import a layered file as footage, you choose to either merge the layers or import only a single specified layer. Choosing to merge the layers makes After Effects treat the layers as a single merged layer, without flattening the layers in the original file referenced by the project. Choose this option if you don't need to animate, reposition, or edit the individual Illustrator or Photoshop layers in After Effects. If you subsequently change your mind, the new Convert To Layered File command in After Effects 6.5 lets you instantly convert the merged footage to a layered composition. (See Importing layered Illustrator and Photoshop files (6.5).)

When you import a layered file as a composition, After Effects gives you access to the individual layers, adjustment layers, masks, guides, and other features created in Photoshop or Illustrator. When you choose this option, you must choose to make the dimensions of each layer either match the layer's contents or match the dimensions of the referenced file. Layers that match the original layer's own dimensions render faster and are easier to manipulate in After Effects; layers that match the original document's dimensions are helpful when you need to align layers manually or to get desirable results with some third-party plug-ins.