Rename the case picture's Background layer to anything else. It is sufficient to double-click the layer in the Layers Palette and accept the default name "Layer 0".
Select the case's window and delete the selection, replacing it with transparency.
Select the phone and place onto a new layer below the case layer, as described in hatstead's post.
Now you can use the Move tool to resize/position the phone layer as necessary so that it appears in the case window.
