The layer button for railroads is hidden by the area that lets you choose what kind of track it is (corner, straight, etc...)
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Okay, if you have a small resolution the layer button should appear under the Furniture icon. Let me know if it overlaps with any other GUI buttons, as I'm not 100% familiar with them all.
Also I decided to add a little tool for me to toggle my resolution between normal and the screen size of an iPod 2g, so I can more easily anticipate situations like this. Thanks!