Ok - this is a re-working of the orignal image, so it won't be 100% accurate. It might also be misleading, as I normally have a rough idea of what I want a picture to look like, and then see where it goes, as opposed to an exact idea. Because of this, it's a lot quicker and misses a lot of the small elements that I normally like to have in there. Hopefully it'll still give you an idea of how I work.
Stage 1 - this is actually 2 copies of the photo of the street, and 2 copies of the envelope texture. Top to bottom they are layered as: Envelope (linear burn), Street (hard light), Envelope (hard light), Street (normal). Both the street layers are stretched horizontally.
Stage 2 - I roughly erased the areas of the street photos I didn't want using a tablet.
Stage 3 - I layered 2 copies of the photocopy of a painting on top. The first one is set to "soft light", the second (higher) is set to "pin light", and I erased various parts of it using a tablet.
Stage 4 - I dropped a section of the photograph of a painting over the top as a "screen" layer.
Stage 5 - I added 3 elements from the photograph of a painting to the top of the image, in order from the top they are "lighten" (the light bit in the top right), "exclusion" (the dark bit in the top right) and "overlay" (the strip across the top that makes it bluer).
Stage 6 - added the wall to the background. This was made up of quite a few different layers, so I've just done a lazy version of it here. The text is brough over the top of it as a "lighten" layer so that the white stands out whilst the texture shows around it.
Stage 7 - added table to foreground. This was done by drawing a circle around a coffee cup using pen/paper, scanning it, converting it to a "colour burn" layer then using free transform to drag it out and give it perspective (dragging the bounding box from a square to a trapezium). I then painted the rough area of the circle out using a tablet.
Stage 8 - brought the various paintings/drawings of the 2 figures into the picture. There's a lot of layering and specific erasing/additional drawing here. It'll be pretty hard to run through exactly what I did, but if you want me to run through this stage in more detail let me know. The main things I use include putting line drawings over the top as either darken/colour burn/linear burn layers, putting painted textures on as darken/colour burn/overlay/lighten/hard light/pin light layers, erasing bits of layers to show other parts I want to get in the picture, and playing with the opacity of various layers to let others show through. I also work on the brightness/contrast/hue/saturation of individual layers and, once the image is flattened, the whole thing.
Hope this is some help.