Cooperative techniques form a new wireless communication paradigm in which terminals help each other in relaying information to combat the random fading and to provide diversity in radio channels. Past work has focused on improving channel reliability through cooperation. We propose to jointly allocate bits among source coding, channel coding and cooperation to minimize the expected source distortion. Recognizing that not all source bits are equal, we further propose to protect the more important bits through user cooperation. To evaluate the gain of layered cooperation, we simulate four modes of communications that differ in their error protection strategy (equal vs. layered, with vs. without cooperation) with a practical channel coder, and show that, for i.i.d. Gaussian sources, layered cooperation can achieve significant performance gains over non-layered/non-cooperative communication. We also carry out an information theoretic analysis illustrating fundamental benefits of layered cooperation.