never rly made a smudge tag.. whenever I make a new layer and draw some random stuff around and im about to smudge it, I have to check "Sample All Layers". Otherwise Im unable to smudge "inwards"...

how come ? :S

where are you checking this?

next to the strength... dl'ed ur psd as well and saw that you smudged on different layers with transparent background

oh i see yah i dont have that checked
you can't smudge in?
it might be the brush

well i can smudge but only outwards.. cant smudge into what ive drawn :S

Mode is set to "Normal"?

Yeah ... Think I figured it out.. apparently its a cs 5 issue... :S

That's new to me, I've never had an issue with cs5.
I believe I've used it for all of my smudge tags with the exception of my most recent one, which was made in cs6.

I think its because this computer runs the portable version so I'll have to wait with your tut till I get my own one back i guess