Freehand feathering can be interesting on scrapbook pages, especially if you are layering the feather photos.
But lets start with the feather for a vignette.
Get your picture and promote the background layer. Choose the rectangle marquee on the side toolbar.
The selection type should be ellipse, mode to either add or replace.
Anti-alias should be checked. You can add the feathering here, but I prefer to do it from the modify menu under selections. You can just undo the feathering without losing the marquee this way.
Place the cursor in the center of what you want to be feathered. Pull the marquee out far enough the feathering will not interfer with the actual picture you want the focus to be on.
Now go to Selections>Modify>Feather. A good starting point is 50, then undoing and changing if needed
Once you have the feathering like you want. Go to Selections>Invert. You will notice the marquee shrank around your photo and the marching ants also appear around the outer edge. This is what you want.
Now hit delete on your keyboard.
Control D will deselect the marquee. (for those interested I finally set my feathering to 150 on this photo).
Now you have a lot of space around the feathered photo. There are several ways to reduce the space. First is just to crop around it, but you may take out part of the feather.
Another way is to do a Control a, Control f, control shift f then shift r. But probably the easiest is to left click on the layer in the layer palette on the right side, hold then drag to the workspace (just not over any other pictures or it will place it in them, unless that is what you are trying to accomplish).
No matter how you do it you need to put another layer below the picture. Layers>Create New Raster Layer. Left click and hold on the new layer and pull it below your picture.
Flood fill the bottom layer with your choice of color. Layers>Merge>Merge All. And now you can make use of the picture frames available in PSP. Image>Picture Frames.
If you want to try something a little different, you can chose a photo that you want to use as your background. Resize(if you are making a 12 by 12, then the short side should be sized to 12". Same would be the same for 8 1/2 x 11.) Now you need to select the crop tool and set the width and height.
Save your "background" with a different name than the original photo.
Now open another photo that you want to feather and put on your "background". Remember selecting the marquee tool earlier. Chose it again, but this time click on the freehand tool. Set the selection type to freehand and the mode to either add or replace.
Now draw around the part of the picture you want to feather.
Selections>Modify>Feather. (this time I chose 50). Edit>Copy. Bring up your background layer, Edit>Paste as a new layer. Move where you want it.
As you can see it covered part of the layer I wanted to be seen. Easy fix. Reduce the opacity of the layer (On the layers palette there is a box with 100 in it. there is also an arrow on the right hand side in the box. Just slide it to the left to about 42). Get the eraser tool, set the size to one that will work with your photo, and the hardness to about 50.
Start erasing those parts that cover the image below. Several pictures can be added to your "background this way, creating a very interesting layout. Just add a title, some journaling or a piece of word art to round it out.