okay here's a little visual...

1. select the layer you want to blend through
2. click on the "add layer mask" icon at the bottom of the layers palette
3. select the gradient tool from the tool menu
4. drag in the direction you want the fade to go...
   5 if you mess up the fade you can toss the mask and "do over"

REMEMBER:
Black makes the underlying image show through and White brings back the image on the masked layer.

the best thing about this method is it is non-destructive!! you don't remove any pixels

retrocity