First thing we need to do is to get the images we want to merge. We will be using the following:
Let's open them both in PhotoShop and begin. We will be importing the man into the landscape image, so let's select all (Ctrl+A) of the man image, and paste (Ctrl+V) into the landscape image. The man is taller than the landscape at the moment, so we will goto Edit > Transform > Scale. We won't make him too small, just yet. We still want him pretty big to make it easier to cut him out - then we will scale him down again. So we'll be working like this:
The next thing we want to do is to cut him out of his background. There are a couple of ways we can do this. Because the background is really light and he doesn't blend in too much with it, we are going to use the Magic Wand tool. So choose the Magic Wand and start selecting the background - choose a tolerance of around 15):
You may find that you will need to change the tolerance several times for selecting different parts of the image, and perhaps even different selection tools. Using a combination of the Marquee Selection, Polygonal Selection and Magic Wand tools I was able to get the following selection (I went over the border to make sure there were no border pixels hiding):
Once we have a good selection, we can hit the delete key to remove the un-needed background. Then we can press Ctrl+D to deselect. We should now have something like this:
Right now, the guy kinda stands out doesn't he? We can blend him more into the background by changing the Blend Mode of his Layer to Luminosity, which will result in:
Next, to check if we have missed any pixels in our selection - which may be the case especially if we used the Magic Wand for most of it - we can do the following. Open up Layer Styles for the man layer, and choose stroke. If we get something like this, we can see that there are some pixels still to the left, near his shoulder and some around his knee and other arm:
We can use the eraser to get rid of the extra pixels, and then turn off the stroke style.
Next, we can position him in the image where we want him and resize him using Edit > Transform > Scale. Remember to hold SHIFT when doing so to maintain the aspect.
You can see that he still stands out, and doesn't look part of the image yet. To remove the light border around him, where we cut him out, let's open up Layer Styles and add an Inner Shadow. Choose a color from the background around him (you can do this by simply clicking the color of the Inner Shadow and then clicking the image in the background - the tool will turn to the eyedropper). Change the angle to 40°, as most of the light border is on the right side, and the shadows in the picture match this, also change the Distance and Size to 3px:
He still has a light border on parts of the left side, so we will use the Burn tool for these.make sure the man layer is selected and zoom in. Choose the Burn tool(O) and a small brush (3 or 4). Change the Range to Shadows, and the exposure to around 60%. Now paint on some shadows - you may not see a drastic difference, but when you're done, just click the last History State in the History panel, and you'll realize how much it's changed - it's just very gradual.
Once we are happy, we can move onto create a shadow underneath him. The shadow will have to be in the shape of his crossed legs, so we can just duplicate his layer, and erase all but his legs:
Because we duplicated the man layer, it has adopted the styles and Blend Mode of it, so let's set the Blend Mode of the shadow layer to Normal and Open up the Layer Styles. We will uncheck Inner Shadow, and check Color Overlay. Choose Black. Now we will align the legs back up with the man and choose Edit > Transform > Rotate 180° and also Flip Horizontal.
We will probably need to trim more off the shadow, and also notice that where the man overlays the shadow, he adopts a black color because of his blend mode:
Let's trim more off the shadow so it's just the legs, and also add a shadow for the bottom of the pant leg sticking out, with the paintbrush. So now we should have something like this:
Now we want to goto Filter > Blur > Gaussian Blur, and choose a value of between 2 and 3. Next, change the Opacity of the layer to around 35%, and we'll end up with the following:
To get rid of the black coloring from the shadow, we can Ctrl-click the man layer to make a selection, and then select the shadow layer and hit the delete key. Our man now looks a lot more blended into the image and like he belongs. Our completed image looks like this: