Lets say we have layer 1 (bottom) with grass, layer 2 (middle) with a tree and layer 3 (top) with another tree in front of the other one.

http://img218.imageshack.us/img218/9594/pic1wh4.jpg[/IMG]

Now if we want to add a 3rd tree in front of that one, basically means a 4th layer is needed. However, we can cheat. Draw another tree in front of it on the same layer (layer 3). Notice how it erases part of the tree you're trying to cover?

http://img204.imageshack.us/img204/8628/pic2bl7.jpg[/IMG]

So we go back to a layer below it, which is layer 2, and recover the section of the tree that was erased.

http://img481.imageshack.us/img481/3947/pic3il2.jpg[/IMG]

As you can see, the replacement on layer 2 is not in conflict with the whole tree on the same layer, which is good. If you want graphics to all overlap each other, I don't think we can do it. Just make sure that if two graphics overlaps, go back to the layer before and recover the lost piece. If it still overlaps with some other graphics, then I suggest try move two graphics a little bit more apart from each other until they don't overlap. Resulting a fake 4th layer:

http://img113.imageshack.us/img113/7781/pic4vk7.jpg[/IMG]

First let's put grass on layer 1 as usual, and a house of whichever shape you like on layer 2.

http://img206.imageshack.us/img206/6051/pic5sx9.jpg[/IMG]

Let's fill up those two triangular holes on the roof. So using that fake layer method, go back one layer before, which is layer 1 - the grass layer and draw the missing part of the roof. It's ok to replace part of the grass with roof because you'll never get to see that part of grass anyways. Feel like drawing a tree? Let's put one behind the house, on layer 2, which is same layer as house. (I drew 3/4th of a tree there, so the other 1/4 of the tree won't erase more of the house).

http://img221.imageshack.us/img221/2314/pic6yz5.jpg[/IMG]

Then simply go to a layer above it, layer 3, to recover that missing corner of the house.

Notice the little holes on the sides of the house here and there?

http://img286.imageshack.us/img286/2343/pic7aj1.jpg[/IMG]

What you can do here is go back to layer 1 and replace those holes with house wall graphics, thus erasing some grass.

http://img286.imageshack.us/img286/8365/pic8om4.png[/IMG]

This is sometimes a small issue, sometimes big. Notice the little white area in the circle? That was caused because that one block of wall graphics is not completely solid, it has a few pixels empty. And since we replaced the grass, it means there's nothing below that and we can see through the hole into the...void. In this case it's a small issue because the hole isn't too big. But some graphics rather leave big ugly black holes in your final work. So if you care:


Now working with layer back and forth, let's add some more trees, and other stuff. Some people prefer adding windows on Events. But when you are building a house or a town, I don't recommend have events containing graphics there. Because you'll likely to shift the map accordingly as you build it, and events must be shifted one by one manually.

http://img219.imageshack.us/img219/1777/pic12as8.jpg[/IMG]

Now you can draw some road and water on layer 1, on top of grass. Draw some fences and other stuff on layer 2 or 3 accordingly.

http://img219.imageshack.us/img219/2885/pic13sp5.jpg[/IMG]

When you make a town, I suggest start with a big map and draw a few different-looking houses. You can then copy and paste houses to locations you like. Typically, it's not really good to have a huge town map but only few house. The map will look vast and rather unlively. Unless you made it that way to fit the story. A town is good looking if it's filled with details. Think of all the appropriate graphics on your town tileset and place them in your town.

For a smaller town like the one I have here, I put houses close together. Leaving enough space for small road and then put decorations on the sides. Sometimes it's nice not to line up the houses perfectly, shift them around. When you draw the road, some players prefer continue road and some, like me, prefer discontinue roads. It's better to not let the hero to reach an edge of a map, unless it's a transition point to another map. You can put intense graphics such like lots of trees, rivers or bushes around your town.

http://img215.imageshack.us/img215/25/pic14ke7.jpg[/IMG]
A forest town (1/2 zoomed out)

Now you can put in NPCs who walks around and it will look a pretty lively town!