1) Ensure that the picture is converted to 16 Million colours
2) Make the background colour the same as the colour that your picture is going to blend into.
3) Select the area of the image that you _don't_ want to fade out.
4) Use the menu option Selections - Modify-Feather and increase the amount of feathering to include the part of the picture that will be blended; somewhere around 10 will probably do the trick. This operation will be hit and miss since there is no way of seeing exactly what the Feathering will include.
5) Edit-Copy the selection and Edit-Paste to a new image or into the image you are composing.
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