Some of my favourite options.
1. is bending options and change the blend mode or the opacity. Only good for certain designs.
2. Add a layer mask to the top layer you that you want to blend with the bottom and use gradient tool. I usually the black to transparent colour. what ever is black on the mask will be transparent on the layer your working on.
3. use the lasso too and trace around an object or image the do select and chose feather then select the amount of pixel you would like to soften around the image select inverse and delete that should remove the part you don't want from the image and leave smooth edges. you could preset the feather on the lasso tool, but i prefer to do it the way i mentioned just incase i want to change the pixelsize of the feather.
4. Use a combination of the above.
I very often combine 2 and 3 together. I would do the layer mask from option 2, then do most of option 3 (except the delete part) on the mask layer then use the gradient tool.