The important thing is to know enough to correct your images for either online or for printing, and then knowing where to refer to for more advanced techniques.
1. Selection (using magic wand, color range, masks and channels)
2. Color correction using Curves (which means knowing about the Color Eyedropper, color profiles, info palettes)
3. Image rotation and cropping (prob easiest to learn up)
4. Touch up work - using the Clone tool and the new touchup tools in PS7.
I refer to a few books on Photoshop, namely:-
a) Photoshop 6.0 for Photographers
b) Photoshop Artistry
c) Inside Photoshop
a) and b) are more technique oriented giving step by step tutorials, while c) is more of a general reference to specific commands or tools.
Interesting list chosen by Darren. Personally I wouldn't consider selection tools to be essential for a photographer; nice to know, but not essential towards photography and editing photographs per se.
I think colour profiling is a major, major area, and probably the one most neglected by many otherwise-very-Photoshop-savvy photographers. Darren's left out a lot of detail; colour management, curves, understanding the different colour models and how they work, gamut considerations, colour bit depth, understanding the histogram and colour channels. I suppose the understanding is the key. Curves, eyedroppers etc are just tools for working with colour; as for example would the channel mixer, variations tool, etc. But if you don't understand the basis behind it all then you'll struggle.