Filters are tools which create special effects. Some of them apply an effect to a picture you are working on, others simply generate an effect on a blank canvas. A number of great filters come with PhotoImpact but some third-party Plugins give you effects that PI does not have or maybe do the same things a little differently or a little better. Once you get hooked on filters you may find out you can't stop collecting them. I have a few favorite plugins that I will talk about as well as some of the effects that come with PI. There are links to some places to get more information on filters as well as places where you can download them--a lot of really good ones are free--on the Links page.
To get Plugin filters to work in PI you must tell PI where you have put them. When you install PI a Plugins folder is created, you can put them all in there but you will want to create some subfolders to keep things straight and so you can remove some so that you won't have to load them all each time you open PI. It can choke if you have too many. You can designate up to 8 folders at a time, designating a folder does not include any subfolders. To install them go to File, Preferences, Plugins and navigate to the folders you want.
To make third-party filters work you need also to have msvcrt10.dll and plugin.dll in your Windows folder. You can download both here. Plugin.dll is an Adobe Photoshop component and is copyrighted so many sites have quit offering it for download. However, a quick search turned up several sites where it was available. If you have any Adobe program such as PhotoDeluxe you will already have it or can get it from the program. Msvcrt10.dll is available in many places and can easily be found with a search.
Here are Introductions to some of my Favorite Filters:
PI's Own Filters