Not that big a secret. Most stuff like this is done by duplicating the layer, as Gini said, using gaussian blur, then playing with the apply layers mode and adjusting the opacity. There's a whole world of effects that can be done just using that technique. The apply layers mode is a MAJOR tool in Photoshop post production and it's vital to learn how to use it.

Talent is God's gift to you. Using it is your gift to God.