This technique is especially useful for creating classy looking
images for your tour pages or other larger-kilobyte pictures.
1. Open your two images in Photoshop
2. Make a selection 3/4 of the image in the first image.
3. SELECT >> FEATHER, and use a value of about 10 (you
may need to change this)
4. Make a selection 3/4 of the second image in the opposite direction.
5. SELECT >> FEATHER, and use a value of about 10.
6. Create a new canvas big enough to accomodate both images and copy and
past the two selections we made above. You will also need to drag them to
the correct position, to get something like the image below. If your images
do not look good together you may need to increase/decrease your selection
or increase/decrease the feather.
There is an alternate way of doing this using Photoshop's
QUICK MASKING.
1. Select your original first image, and hit the QUICK MASK
button
in the toolbar.
2. Using the GRADIENT tool
drag across your image horizontally (or which-ever way you want to blend
your images)
3. Notice how this creates a REDISH looking gradient over your image.
The darkest red means it will be completely opaque or clear, and slowly
as the gradient pales and stops it means that part of your image will gradually
appear. So in our image below, the image in the far right will be clear
and the image in the far left will be visible, with varying levels of visibility
in between.
4. This method can be used to blend images in any variety, to produce
similar results to our first method.
in the toolbar.
drag across your image horizontally (or which-ever way you want to blend
your images) 
