GIMP :: Blend Solid Edge Of Picture To Background / Also TEXTURE?

I used to work in Photoshop and GIMP, but then became sidetracked. I've forgotten half of it. I used to make siggies for others all the time, although I really was guessing my way through some of it. I knew I could do better.

Anyway, I figured it'd be wise to start with a really basic question. I'll use the pic below as an example.

In a pic such as this one, how would you go about seamlessly blending the edge of the picture with the background? (All I did so far was have 2 separate layers; the picture of the hottie, and then behind it of course was just the template where I tried to match the pink from the hotty pic).

I'm also curious about just blending 2 or more photographs together to create a collage. I've done this before, but I know I made it harder and more tedious than it had to be. So.... would a collage have to be done a little differently.

I used to go about all this various ways way back when, but like I said... I've forgotten half my little tricks which I know really weren't the correct and easiest route to go about it.