Does anyone know what the differences are specifically between the two programs?? I'm just starting out, and am taking a class where we use Photoshop cs2 exclusively. I'd love to get it to use at home, but would settle for Elements if they are similar. I just want to know what specific programs Elements lacks.

You can probably do your invitations without a problem...  Elements doesn't support curves and a few other things.  But, from what I understand a lot of the functionality can be gotten through plug-ins. 

I'm not an Elements user, so take it FWIW...  Huge price difference though. 

I use Elements 4.0. .. . for me it works fine and I can do almost everything I want to with it . . . but my friend has the PhotoshopCSwhatever it is.. .  and there are times when she will say well "do this to a picture" and I don't have what she is referring to . . . I know that Elements doesn't have curves(but I think there is a plug in for it) and it is also not capable of doing the masking like PSCS does. . . oh and I can't record actions either which I heard can save alot of time in editing if you are applying something that you use all the time to a picture. . . The newest version of Elements is 5.0 and I've heard it has some added features to it so there may be some of those things in it that they didnt' put in 4.0 . . but for the money I think you'll find Elements to do what you need it to . . . I have created collages, graduation announcements, and other things with elements with no problem. . .

Elements is similar to PSCS2 in several ways so it is sufficient for general editing and your announcements.  However, in my opinion, CS2 is worth the extra money for the curves, bridge, quick masks, and actions alone to name a few.  The actions especially saves me a HUGE amount of time for general b&w conversions, flattening and saving images, and the list goes on and on....

I've had Elements 3.0, 4.0 and recently upgraded to CS2 and love it.