Placing the Boy into the Bubble

To begin, I have an image I would like to put in a bubble.

I also have an image I will use for reflections:

We will use the latter image later in the tutorial/

Before we can make my son float away, we need a bubble to place him into. Here comes the fun part!
Create a new image. Here are my dimensions:

Width= 9 in
Height= 5 in
Background= White
RGB
150 DPI

Create a new layer and make a circular selection with the Elliptical Marquee tool. Fill this layer with the radial gradient, white to light blue. In the layer styles apply a slight drop shadow.

Make a selection around the image you want to place in the bubble. I used a slight feather when making my selection, copied it, and pasted it into the bubble image. Using the Edit>Transform>Scale command, I resized the photo to fit within the bubble, centering the face roughly in the middle. I applied the Distort>Spherize filter to give the photo a bit of a curve, and finished up this layer by applying Filter>Render>Lens Flare.

Create a new layer. We need some highlights to further the illusion, so with white as your foreground color, Command/Control>Click the layer with the gradient. This will make your circular selection active again. Select the Airbrush Tool and select a feathered, circular brush.

In the new layer, paint some highlights along the bottom edge of the bubble.

Select a blue or purple for your foreground color. Create a new layer and, with your selection still active, repeat the process in the previous step. This time go around the upper edges as well. You may even want to use a couple different colors for your highlight. For my image, I then clicked the layer styles icon, selected a light blue outer glow, and applied a slight drop shadow to this layer.

Create a new layer, select a blue foreground color. Go to Edit>Stroke, Inside, 10 points. Gaussian Blur the stroke to 25.

Create yet another layer. Set your foreground color to white, background to light blue. Fill this layer with the radial gradient again, and set the layer opacity to 25%.

Remember that second photo we opened? We are going to need it now. Copy the photo, and paste it into the bubble photo. Resize it so that it fits within the bubble (Edit>Transform>Scale). Go to Filter>Distort>Wave, and give the image a slight distortion. You may also want to apply the spherize filter. Set the layer mode to overlay, and move the pasted image around so that it appears to be reflected in the bubble.

Now for some more highlights. Create another layer, and with white set to foreground, choose the airbrush tool again. Select a circular brush with sharp edges and paint along the curve at the bottom of the bubble. You now want to distort this a bit, so go to Image>Liquify, and just warp portions of the highlight a bit. You may even want to add some sparkles with the paintbrush to this layer.