From YourSITE.com
PROGRAM BASIC: Creating Faux Depth Of Field
By Jeri Ingalls 2006
May 1, 2006, 04:06
Have you ever gotten a great photo, but the background was just too busy and it distracted you from the subject? This tutorial will show you how to soften the background and bring into focus the part of the photo you had intended to focus on…without actually removing the background.
I really liked this photo of my cat Winnie, but it was taken at the spur of the moment, therefore I hadn’t been paying much attention to the tree in back of her. So I want to soften the tree in back of her, yet keep her sharp and focused. The first step is to open the photo onto your desktop and do any sharpening or contrast adjustment that you want to do. Focus only on the subject when using the sharpening effect, when you get the photo the way that you want it, you’re ready to begin.
First choose the Lasso Tool highlighted below. This will turn your mouse (or pen if you are using a tablet) into a rope that you will then use to draw around the subject.

Holding down the left hand button on the mouse, drag the lasso around your subject. Try to get as close to the edge of your subject as you can, but don’t worry if you’re off a bit, it’s easy to fix. When you fully have the subject encircled, let go of the mouse button. Click on the pick tool as shown below to highlight your lassoed selection. 
Because Winnie is a furry subject, I’ll need to do some adjusting to the selection. To do this, first zoom in on your image so that you can see it closely, click back on the lasso tool, then in the panel above, click on Editing. This will put a bunch of little squares (points) onto the line you drew around your subject. These are what you use to adjust your line more precisely.
Click on the points to move the line over to its appropriate spot on the photo. Each point also has handles that you can use to extend or shorten the line, as well as curving the line around. I’m not going to go around every hair of course, but this will allow me to get Winnie separated from the background as much as I can.

When finished going around the whole subject, click on the pick tool again to get out of the editing mode. Repeat this until you are satisfied that you have gotten the lasso as close as you can to the edges of the subject.
Now, in the top menu bar, go to Selection, and choose Invert. This will switch your selection from the subject to the background, which is the part of the photo that you want to make the changes. With the background selected, go to Effect>Blur>Gaussian Blur.
You can set the radius at whatever pixel number you want, I chose 8 for my example here. This really softens the background and brings out the cat. Choose OK to apply the filter and you’re finished! Here is my before and after.
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