How do I create a fading effect in Adobe Photoshop CS3 Extended version?

Question

I have an image that I would like to blend into it's background, rather than just stick out.

Thanks, :]

Answer 1

To fade an image into another you have to use a layer mask.
To learn about layer masks read this tutorial:

http://www.sitepoint.com/article/photoshop-fade-layer-mask