I am very new to photoshop.
Please can anybody help me with the concept of shadows and highlight
.How to create them ? when to create ? And everything about it.

you can start from here http://photoshopcontest.com/tutorials/28/shadows-part-i.html

GOOGLE is your friend.

Lots and LOTS of tutorials and stuff out there.

START HERE

http://www.smashingmagazine.com/2009/04/20/5-simple-tricks-to-bring-light-and-shadow-into-your-designs/

What Reindear said... google 'ps tutorial shadow light'.

Another point you should look at is shading. The use of gradient overlays to give depth and feel of curves. A simple thing to try and get the feel for it is make a simple circle look like a round ball. I made up a dark lite dark gradient for that and for use with the look of pipes.
The biggest and simplest thing is that on a curved piece say a pipe the sides are darker then center. Unless the lite source is coming from somewhere else then the highlite follows lite source, shadow opposite of lite source, reflections are usually between object and looker how much reflection or how sharp would be according to how far and how tall, or how high the looker is.
Also using the gray in multi as a painted shading to give more depth. I threw these examples together and tried to explain my use of, hopefully it helps, if not toss them.

I'm beginning to confuse myself here.

http://s31.photobucket.com/albums/c377/Martrex/?action=view&current=Shading-example.jpg
http://s31.photobucket.com/albums/c377/Martrex/?action=view&current=example-2.jpg
http://s31.photobucket.com/albums/c377/Martrex/?action=view&current=example3.jpg

thanks to all... above info was quite helpful to me