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Here you are going to learn a very simple yet very effective way
to create beautiful blends and fades. Create a new document at the desire size
that you want. Keep in mind your end format (72 for web, 300 for print).

Now, find a photograph of a person that you think should work
well with your other chosen photograph. When designing, you’ll learn to
pre-visualize and “feel” a design or idea just by looking at independent
elements (photographs, layers)...if you’re not there yet, it will come with
time and
training.

Now, make a good selection of your person, actor, character.
Here I’m using the magic want tool with a tolerance of 10. Since the background
is so simple and the pixels are almost the same shade of the color, it will be a
very easy selection (I wish they’d all be this way). In this case, select the
background and then right click and select inverse; you want to do things the
easiest way that you can. You could try and select her, but in this case keep
your sanity and select the simple background and then “inverse” it to close in
on her.
Now, with the person selected choose the Move tool (v) and click
inside of the selection and “drag” it over to the desired image that you are
going to blend with. Dragging a selection will create a new layer on the new
document which is actually a copy (the original selection is still on the first
document). Now you have a copy of your chosen person or object on the new
document. Here’s where it gets fun.

And it’s so easy to do this you should be SHOCKED. Simply create
a layer mask on the layer of the object you dragged over (Layer: Add Layer
Mask..or click on the Add a Mask icon in the layers palette). By creating a mask
you are going to allow pixels to be “hidden”. This is better than erasing them.
Gradient layer masking is my single favorite tool in Photoshop and I use it all
the time. Choose the linear gradient tool with foreground to transparent and
black as the foreground color and just SWIPE.

The longer your swipes are, the smoother the blend will be; the
shorter your swipes means there will be a shorter, crisper blend. Gradient layer
masking allows you to quickly create very professional blends. The First Edition
covers layer masking extensively.
Now, to add some more character to the final image, create a
gradient fill layer on the adjustment/fill layer icon on the bottom of the
layers palette.

You can choose the settings you so desire in the dialog box.
Here I’m creating a black foreground to transparent gradient fill. This will
allow black to fade into the rest of the image where I choose it to. You can
change the settings and style but I’ve chosen linear at this angle. Black is a
natural color and can look like darkness or night whereas choosing a rainbow
gradient but be kinda funny and unnatural in this case (too "vectory").

Often times I’ll go ahead and take it a step further by
duplicating a layer and changing the blending modes and opacity just to see what
looks best to help with a desired effect or mood. Here I’ve got the top layer on
Normal with the opacity brought down and the bottom layer of her on screen. Note
again that the black on the layer mask is hidden pixels and white represents
what is showing of that layer. Also, when you duplicate a layer with a layer
mask, the new layer will be an exact replica with the layer mask too.
 
And here is the final result. You see we’ve taken a selection,
brought it in, gradient layer masked it to blend in with the rest of the image.
And then I’ve added a black gradient fill layer to fade to darkness and changed
some blending modes. Even though you should be able to tell its not a perfect
selection (I was in a hurry), your mind should just be storming with ideas of
what you can now do! This should open whole new worlds of possibility up to you
so please take advantage of it because it took me a few years to figure it out
on my own (how stubborn huh?!).
Get this and hundreds of other .psd finished designs from the iPSD Directory
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