The rear sight is held in place by the slide cover (the thing on the top of the slide, running from the rear sight forward to the rear of the barrel), and no attempt should be made to drift this sight.
The front sight may be drifted if necessary for windage adjustment, but not too much, and it usually provides acceptable accuracy as is. Elevation adjustment is only feasible by varying the height of the front sight by filing the top or installing a taller one. Again, it's best to live with it as is, unless a previous owner has over-shortened it.
Visible above the decocked hammer is the loaded chamber indicator, which in this case indicates an empty chamber. When a round is chambered, that pin will protrude rearward to let you know the gun's ready to go bang.
The Walther P38 has a number of safety features, some of which may cause trouble after the gun has seen some use.
The most visible feature is the safety/decocking lever, on the left side of the slide. When in the up (fire) position with the hammer down, the P38 is safe to carry (the firing pin is positively blocked). Simply pull the trigger to fire the round in the chamber.
The firing pin block is only disengaged: in double action mode when the trigger is pulled almost all the way to the firing position, or in single action mode when the hammer is cocked. This is a good feature, allowing the pistol to be safely carried with the hammer down and the chamber loaded.
The hammer cannot be cocked with the safety in the down (safe) position.
More safety features are discussed on the next page.