lets see, there are a number of effects at work here. Be advised these are just conjectures, nevertheless the techniquest I'm describing should work. I won't use much detail, as my time is short, but if you need more information there are many tutorials available.
For the two girls you would take each picture and extract it from it's background with the magic wand/masking, being careful it's not choppy and jagged, then place each one on their own layer with the faded one below the other one on the layer list (so the other one is on top in the picture) then, when selecting the image you want faded, use the slider in the Layers window to adjust the alpha, which makes it more transparent. the background is some kind of abstract effect, most likely using the Distort-Ripple filter and/or the blur tool, probably a tutorial somewhere. The border is similar, with less Ripples (or Zig-Zags, also under Distort) with an outside stroke and (possibly or, hard to tell) a drop shadow to "rise" it up from the picture. The important tools for the picture stacking is layer opacity (alpha) and the layer order, both accsible in your layer window.
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