This tool is used to select portions of a file or layer.
With the Lasso Tool, one can select an irregularly shaped area by drawing around it with the mouse held down.
With the Polygonal Lasso Tool, one can select an area by clicking on just a few points around the desired area. This tool allows one more control than the simple Lasso Tool.
With the Magnetic Lasso Tool, one can move the cursor along an edge and the selection lasso will snap to the edge like a magnet (more or less). Useful, but requires a certain amount of practice.