1. Begin by opening up any amount of images. I chose 2 pictures I took last year in Toronto. You can open each picture in its own window (document) or you can copy>paste them in the same window.
2. Arrange the images so they are near each other. Have them overlap where you want them to blend together.
3. Now you will need to select the top image and then click 'Add Layer Mask'. Your layer palette should look something similar to this prior to selecting the layer mask tool:
4. To make the blending process easier, you can nudge (Down Arrow) one of the images down a bit. This will help in determining the length that the gradient line will be.
5. Select your gradient tool (G). The settings bar should look like this:
6. Next, click and hold down the shift key and make a horizontal line where the images overlap.
7. You should get something like this:
8. To make the blending transition more harsh and noticeable, simply make the gradient line shorter, like so:
9. This is what it will look like:
10. Now you can nudge (Up Arrow) the image back up.
11. Then crop, and there ya go! Simple and effecting technique that takes only a few minutes.
The final product:
Click to enlarge