Prasanna,
Layers represent objects, you can have 64 on screen. Planes/FIFOs represent pixel blending capacity. Imagine you have 64 layers on top of each other, only 6 first layers would be blended and each layer pixels would go to those FIFOs. Those layers would need to be transparent in order to be blended. I added an slide from a previous deck from FTF 2012 which may make this a bit more clear. I would like to point out that you do can have 64 object simultanously, the limitation blend up to 6 only comes up when you have overlapping with transparent component layers.
Regarding your comments about the documentation, I will take a look and add some notes on the draft version where appropriated based on your feedback. Feel free to let us know any other findings you think we should be looking at.
Ioseph