Q: Do you keep your photos and digi supplies in separate catalos in Lightroom?
I don't keep photos and supplies in separate catalogs. If I did, it would totally disrupt my workflow. The main reason I moved to Lightroom was to make my life easier and have everything in one place. If you want to see how this works in real time, check out this tutorial (which gives you sneak peek of my workflow when I scrapbook inside Lightroom and shows you how to make your own photo grids for digital layouts).
Q: How do you delete Catalogues in Lightroom.. I want to start afresh?
Using Windows Explorer or Mac OS Finder, locate the catalog folder you created and drag it to the trash.
Q: What do we do with layered psd files in our digi supplies?
Nothing – just import them like everything else. Lightroom works very well with PSD files. Please note that to have PSD files work optimally in Lightroom, the file must be saved in Photoshop with the Maximize PSD and File Compatibility preference turned on. You’ll find the option in the Photoshop file handling preferences. Lightroom saves PSD files with a bit depth of 8 bits or 16 bits per channel.
P.S. – I think I fixed the comments to make them easier to work with – thanks for the heads up! 
pennyshilling
So glad that the psd files will work and move into the LR catalogue. Am heading back to view your workflow video again..to check out the process using one catalogue. Thanks so much!
Kathleen D
Thank you so much for all the work involved with this class Kayla! Can you talk about how LR names catalogs? I have been using LR for years and wondered if I could change the name of my catalog to make more sense. In the past, each time I backed up my catalog it added a subfolder with the new date within that original folder. Things got really confusing after awhile.