Although paths can serve numerous purposes, the primary reason why they are so important to so many Photoshop pros is their power and flexibility in creating precise selections. The process of creating a path around part of an image is no different than the process of making a bowl or a piece of paper, but instead of arbitrarily placing points and making curves, you're tracing part of an image.
The following example uses a combination of straight path segments and curves to create the basis for selecting the edge of a boat. To accomplish this, follow these steps:
Stretch the document window slightly beyond the image boundaries, so the edges can be seen and used as guides for the left and bottom edges of the path.
Use the Pen tool to place an initial anchor point on the bottom left corner of the image.
Shift-click the Pen tool at the top edge of the boat to create a straight edge. From this, zoom the image to 200 percent to get a better view of the boat's contour.
Mentally divide the outer edge of the boat into about five or six segments, then begin by placing the first anchor point, and immediately going back half the distance to the last anchor, and placing another.
Use the Direct Selection tool to "nudge" this "middle point" upward until it conforms to the curvature of the boat hull at that location. Repeat as many times as needed until the bottom of the boat is reached. Close off the path by Shift-clicking one final time ...