Step 1 Firstly, create a new document - I've chosen to use 500 by 500 pixels for this tutorial. Pick a couple of images that you want to blend together - I've gotten a couple of counter strike pictures from flickr (image1 and image2).
Step 2 Copy the image you want to use as the background (I'm using image1 from step 1) into your document. You can do this by right clicking > copy image and then going Ctrl + V on your keyboard in Photoshop to paste it. Move the image around to where you want it.

Step 3 Copy the image you want to blend into Photoshop (same way as you did for the first image in step 2). Again, move it around to where you want it to be (I've positioned the guy on the left to be on the left of my image because he is the one I'm going to be blending into the background).

Step 4 Add a layer mask to our new image layer (the third icon from the left at the bottom of the layers window).

Step 5 Select the gradient tool and set it to radial. Under the gradient editor (click the gradient at the top left of Photoshop to bring the menu up), enter in the settings below (by dragging the little icons under the gradient).

Step 6 Now apply the gradient (on the layer mask) by left clicking in the center of where you want the image to show through, and drag to the opposite side of the document and release so you have something like below.

And there you have it, image blending ;) | |