if you're going to blend a pic nicely, you first need to learn how to cut...
my two favorite methods are using the polygonal lasso to select the area, or using the pen tool to select the area.
Polygonal lasso takes longer, as you have to click around the entire area painstakingly... when you're done, you can add a feather to the selection to make it nicer using the Selection menu options.
With the pen tool, you can sort of wing it, and then come in with the "Add anchor" tool and fix the resulting shape to fit your outline... then right click on the shape, choose "Make selection". Then it'll ask you if you want to feather the edges (it's usually prettier if you do by one or two pixels)...
then select the layer that the image is on that you want to cut out, copy, and paste it over your background.
And then, you just have to play with blending modes and opacities to achieve the desired effect
