From: Daniel Piechnick
Hi Jose Do you mean diffuse? :) (Defusing is for bombs) :P There are a couple of options here. You can use the Blur Tool, and run it along the edge of the image. To get a more precise effect, you can use the Selection Tool or the Lasso Tool (depending on the shape of your image) to select the edge of the image, and a whole lot of blank space around it (you may need to increase your canvas size if there's not enough blank space). You can then click Filter > Blur > Gaussian Blur to blur the selected area.