Here's a little tut i put together for you guys, the final result isnt that good due to the fact that i did it in 10 minutes. enjoy all the stock is off www.sxc.hu




first i started with a random guy, cut him out then scaled him so he was in proportion with the scene, then i created an elliptical selection,filled it with black, placed it on the layer under him and guassian blurred it for a shadow effect.






here i duplicated the dude and placed him behind the original and blured again and set the opacity to about 50% just to reduce the sharpness between him and the bg
i reduced his contrast and brightness so it matched the bg, then i merged all and up'd the brighteness to show more detail



here ive just cutout a toy bunny's head and placed it on top of the original, then gaussian blurred it about 3 or 4




duplicate and change the blend mode on the blurred layer to what looks best and add a distort->diffuse glow for effect, add a curved border by using select-modify-smooth and some type and an ornament (you can get fonts that are all ornaments)

hope this helped