Easy hun -
1. Add a shadow layer onto the paper
2. Under the marching ants tool ("M" on your keyboard) is a circle (do shift M to get the circle tool).
3. Hold shift (to keep a perfect circle) and simply drag the circle marching ants tool out until you have the size circle you want.
4. F2 is cut (or many other ways but F2 is quickest for me!)
You can also do squares by using the normal marching ants tool and holding shift when you drag for perfect squares.
I have a feeling katja's page is a template by SAS Designs though. But cut outs are truly so easy! The hardest part is knowing where to put them! If you go wrong (which I frequently do!!) then simple use the clone tool and go over the cut out to replace the lost bit and start again (if it's a textured or patterned paper you may want to clip the paper to a layer instead).
NB: You can add another paper beneath that cut out paper layer if you like.
Hope that helps!