Merge pictures with soft edge

How can we best merge different picture shots of crowd, woods, buildings, scenary, etc into a big picture with soft edge between them like the attached sample? Please use CS3 photoshop.
Thanks.
softedge1.jpg
ksfokAsked:
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osiris00Commented:
There are many different ways  but the simplest methods are using anti-aliasing and/or feathering.
You can smooth the hard edges of a selection by anti-aliasing and by feathering.

Anti-aliasing Smooths the jagged edges of a selection by softening the color transition between edge pixels and background pixels. Because only the edge pixels change, no detail is lost. Anti-aliasing is useful when cutting, copying, and pasting selections to create composite images.
Anti-aliasing is available for the Lasso tool, the Polygonal Lasso tool, the Magnetic Lasso tool, the Elliptical Marquee tool, and the Magic Wand tool. (Select a tool to display its options bar.)

Note: You must specify this option before using these tools. After a selection is made, you cannot add anti-aliasing.

Feathering Blurs edges by building a transition boundary between the selection and its surrounding pixels. This blurring can cause some loss of detail at the edge of the selection.
You can define feathering for the Marquee tools, the Lasso tool, the Polygonal Lasso tool, or the Magnetic Lasso tool as you use the tool, or you can add feathering to an existing selection.

Note: Feathering effects become apparent only after you move, cut, copy, or fill the selection.

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ksfokAuthor Commented:
Please kindly list out all steps in numbered order. Thanks.
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