The blur tool has a checkbox marked "Use all layers" that will blur all visible layers at once. It's especially handy if you create a new empty layer above the layers you want to merge. You can also partially erase the top layer to blend the layers together. You can do this directly with the eraser tool or indirectly by adding a "Layer mask" to the layer you want to erase and painting in gray on the layer mask. I find the airbrush settings especially useful for both these operations. It would also be useful to know which version of Photoshop you're using. There are significant differences between 5,6 and 7. - Ken Heronheart -