The Layer List allows you to select, which map layers are visible and which layer is active at any given time. If under the visible column the square box is unchecked, then that particular layer will not be displayed with the other map features and therefore can not be used as an active layer.
Another facet of this button is the active layer function; this is required for feature selection and identification. The Active layer must be selected prior to utilizing the functionality of the Identify, Query, Find, Buffer, Select by Rectangle and Select by Line/Polygon push button tools. The active Layer is selected by clicking on the round box adjacent to one of the listed layers. Only one map layer can be active at any given time. When making any modifications to the Layer List, click the Refresh Map button to redraw the updated map. The layer list may change as you zoom in and out.
The Legend List shows the symbols associated with each of the map layers.