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Open your background image into Photoshop. For
my example I used a background image of a space nebula.
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Open up your second image that contains the object you want
to use. If necessary, draw a selection around the object with
the LASSO tool. Next, press the V key to activate the MOVE tool
and drag the selection on to the first image.
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Click on the first icon on the bottom of the LAYERS palette
to add a LAYER MASK. Press B to activate the PAINTBRUSH and
then select a medium, soft-edged brush. Paint away all that
is around your object. If you make a mistake, simply press the
X key and re-paint the original background back in again.
When you are left with just the object, discard the LAYER MASK
by dragging its icon onto the TRASHCAN. Make sure you don't
drag the image of your object, because it will be deleted. Click
on APPLY to accept the LAYER MASK you have just made.
Now that you have just your object on its own layer, its time
to apply a gradual fade. This is done using a combination of
QUICK MASK and the GRADIENT FILL tool.
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Press the Q key to enter QUICK MASK editing mode.
Select the GRADIENT FILL tool from the tool box, and then press
the ENTER key to access its options. Make sure that Foreground
to Background is selected from the drop-down list.
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Move your cursor to just above the top center of your object,
click and hold your left mouse button and drag a line to just
past the bottom of the object. (NOTE: to force a straight line,
hold down the SHIFT key while dragging the cursor).
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You should now see a mask, gradually fading out on your screen.
Press the Q key once more to return to the STANDARD EDITING
mode. You should now see the selection (marching ants) around
the bottom half of your object.
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Finally, simply press the DELETE key to remove part of the
object. Because we combined the QUICK MASK and GRADIENT FILL
tools together, the object gradually disappears, leaving a smooth,
gradual transition.
You can use the method on most of your projects.
Try combining other tools with the QUICK MASK to see what effects
you can come up with.