The Extrude option makes the cutout appear to pop out of the image by redrawing the cutout one layer on top of another. Each layer in the stack is offset slightly from the one below so only the edges of the layer are visible.
When you create a cutout using the Extrude option, two layers are created to produce the effect. There are vertices at the centre of each layer for manipulating the layer. You can change the depth and direction of the extrusion by moving either layer.
Changing the Colour of the Layers
Enable Use Colour to apply the current colour to the extrusion layers. The cutout image is used for the top layer only. When Use Colour is enabled, use the Brush Opacity field to set the transparency of the extrusion layers.