There are a number of ways to blend an image into the background with Photoshop and Elements. Here's one method that makes use of the Pattern Stamp Tool.
Begin by opening a background and an image in Photoshop or Elements.
Select the image document to make it active.
Choose Edit > Define Pattern from the Menu bar.
When the Pattern Name box populates, give your image a name and click OK.
Next, select the background image.
Create a new transparent layer by clicking the Create a New Layer icon in the Layers panel. This puts a transparent layer on top of your background. Select the new transparent layer.
Get the Pattern Stamp tool. This tool hides under the Clone Stamp tool in the Tool panel.
Note: In recent versions of PSE, choose the Clone Stamp tool, then click the Pattern Stamp tool option in the Options panel.
In the Options bar, choose a brush. You can use a soft round brush, a grunge brush, a paint stroke brush, or other brush depending on the look you want. Leave the Mode set to Normal and Opacity at 100%. Select your image from the Pattern picker drop-down menu. It will be the last pattern in the set.
Begin "painting" on the new transparent layer by clicking or clicking and dragging.
Be careful to avoid the edges of the image so that you donít get a straight line or multiple images. Undo your painting if you see a line.
Switch to the Move tool. Make sure "Auto Select Layer" is selected in the Options bar.
Move your painted image into position.
Now blend the painted image by reducing the Opacity of the layer. Youíll find the Opacity slider at the top right corner of the Layers panel. Dragging to the left reduces the opacity.
Alternatively, you can blend the image into the background by changing the Blending Mode. The Blending Modes are found above the Layers panel and are set to Normal by default. Try Overlay or Soft Light.
Your image will fade into the background, creating a subtle effect.