Blending affects how the new layer is placed on the old ones.
The mix amount defines how much the layer is blended. A value of 0 makes the layer invisible, 1 makes it opaque.
Blend Mode (The grid with Mix, Add, Subtract etc)
The blend mode is how the two layers are blended. Given the RGBA of both layers, how does it choose what color to use as the end result. You can see a grid of them below, along with descriptions of what they do.
This can be used to fadeout a layer based on how far away it is from the camera.
Start: The distance at which the fading out begins. The layer will be visible here. End: The distance at which the fading out has finished. By here the layer will be fully invisible. Slider: The minimum and maximum of the Start and the End, along with a visible representation of the range. This is used if you create an input for the Start or the End, to decide the range to allow in the material panel.
Use Alpha defines whether to take the layers transparency into account when blending. Turning it on is slightly slower.
The Mask is a seperate alpha channel you can create in the Masks section. When applied, the original alpha channel and the Mix Amount still apply.