Photoshop :: Curl Paper Effect And Paste Image On Paper

I'm using version 7, I'm trying to create a curled paper effect then paste an image on the "paper". A couple of web sites suggested creating a rectangle then create a path or something like that and then using the pen tool and the "handles" manipulate the corners. I'm not sure if I have the terminology correct but the problem is that when I create the rectangle and go to add the path (the icon looks like a circle with handles on it) it's grayed out and can not be selected and manually creating a path with the pen tool doesn't work.