Submitted by and © 2004 Sandy Drieschner
Draw your shape or fill you paper with the color you want or texture you want. Ensure that the layer is a raster layer.
Then under the selection tool click on the free hand selection(looks like a lasoo). Now with your left mouse button hold it down and draw a jagged edge along your image to how you want it torn then still holding the left button down draw a loop outside of the image to connect it together.
Once done your image should look like this
Go up to the selection menu and select none. Now you can add you color to the edge if you want, or you can just add a drop shadow.
To paint an edge to look like torn try this. Select the paint brush tool.

The setting should look like this.

size 10, hardness 50 step 10 density 100 thickness 100 rotation 0 opacity 100, blend mode burn.
Now paint along the edge with the color of your choice. I usually use a lighter color than the image, white always looks good. Experiment with painting until you get it correct, I just go over it until I am happy. Then you add your drop shadow when done. I choose usually 4-6 both vertical and horizontal for the drop shadow and use a dark grey or black.
Finished product with drop shadow of 4 black.
