Here is the picture that I will begin with.
The first thing you will want to do is duplicate the layer. Layer/Duplicate Layer and click OK. With our new layer highlighted, select Filter/Blur/Gaussian Blur. This is the area to tweak for different levels of cartoon effect. Reasons for changing these settings will depend on picture size and resolution mostly. Colors and lighting will also be a factor. Here are the settings I used for this picture whose resolution is 72 pixels/inch.
Now there is only one other thing to do. Set the blending mode of this layer to darken via the flyout menu. Very simple stuff here.
And here is what I came up with. As you can see, the lady in the background has been blurred out too much. If we were focusing on her we would need to reduce the blur to get a good cartoon effect.
Here is a before and after.
I have found that this particular technique seems to work better on close up shots, but again, adjusting the level of blur can make up for some of that. This also works really great on animals. Here are a couple of before and afters.