All edits in Lightroom are non-destructive, i.e. the source image files are not changed at all. Your edits are stored in the Lightroom Catalog file, which is a kind of a database. You can go back at any time to any previous state of any image. When you are happy with your edits in Lightroom, you may export the file to common image formats or transfer it to another program (e.g. Photoshop) for further editing.
Lightroom is not a replacement for Photoshop, although sometimes edits that you can make in it may be sufficient. Generally, it's much faster and convenient to perform basic color and perspective corrections in Lightroom than in Photoshop. However, advanced functions such as e.g. layers are not available in Lightroom and would require exporting the image to another application.
Photoshop will not organize your image library, and this is one of the areas at which Lightroom excels. I use it to organize and manage all my master image files: RAWs and TIFFs. For managing and keywording JPGs, I use Adobe Bridge, which is bundled with Photoshop.
Below are some of my images which I edited in Lightroom.