Select the Paths Palette.
Select the pen tool from the tools palette
Click on the outline of the picture so that you get something like this
From the paths palette, select MAKE SELECTION
Use a feather of about 4 pixels
Now from the paths palette, select TURN OFF PATH
Copy the selected image by using CTRL-C
You can then paste it on a new blank image using CTRL-V
This will give you an effect like what you see on top.
Did you get it right?
