It's tougher to do in PSE. It really requires the ability to use paths and the pen tool, which are available in Photoshop.
The only thing I might suggest is that you use the magnetic lasso for your extraction. Make sure you're not feathering the selection. You could always zoom in and paint/erase pixels to smooth the jaggies.
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Cassie
My Gear: Nikon D300s w/18-200mm VR & 50mm 1.4
Software: Adobe Photoshop CS4, PSE 10, Lightroom 2
 
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