how to fade edge of picture in cs5

You can either select the object you want to fade then "feather" the selection and delete the feathered portion, or you can use a gradient mask.
For feathering: select the object and go to the top of your window and to the drop down menu under "Selection" I think the prompt is "modify selection." Then use the "Feather" slide bar to feather more or less. From there, copy your selection and paste it into a new layer and hide your original image to see what you've got. You may have to play around with this some, undo and redo it a couple of times to get the desired effect.
I so rarely use the gradient masks that I usually have to fiddle around with those a whole lot more, this is the basics of what you need to know: You can chose different gradients, linear, spherical, etc. and you can change the gradient colors or choose no color by double clicking on the boxes on the gradient slide bar.
The thing I always remember though is that the best way to learn anything (Photoshop included) is through practice, practice, practice.
Good luck and I hope this helped!

Try using your eraser tool at a very low opacity. Continued to go around the area with the eraser tool until it's faded to your liking. Make sure you're not using the hard eraser brush though.

You can also see the video in this site to learn it.

www.metacafe.com/watch/1092807/cut_a_picture_out_with_faded_edges/

If you have other graphics programs with those features, you can create it in  that graphics program, and then "save as" with the file extension Publisher accepts. Then open Publisher, click "insert", "picture", "from file" and click on the file you saved to insert it in your publication. To see file extensions Publisher accepts, type image or picture extensions in the help file.

 

Select the oval with the elliptical marquee tool.

Feather the selection with Select > Feather. Larger the feather the more
gradual the fade.

Select > Inverse

Edit > Fill with white as 'Contents: Use.'

If the fading is too abrupt or too diffuse use History to return to the Select

>Feather step and change the feather amount until you have what suits your taste.

1. In the Layers panel, target the items you want to round.

   If you want to round a specific attribute of an object, such as its fill or stroke, target the object in the Layers panel and then select the attribute in the Appearance panel.

2. Choose Effect > Stylize > Round Corners. (The command is located in the first Stylize submenu.)
3. To define the curvature of the rounded curve, enter a value in the Radius text box, and click OK.