Now that you know how to use layer masks, you are ready to use the gradient tool. Set up PSE to have a photo layered over a paper like this. (Papers are from Fantasia's Charm Backpack created by Nicole Young, a blog freebie that will soon be available in the DSP store.) (Click on any of the photos to see them larger.)
Apply a layer mask to the photo layer (see this tutorial for how). Also, make sure the mask is selected, indicated by the double frame around it.
Now select the gradient tool on the left Tool Bin (arrow 1). Once that is selected, go up to the tool menu and select “linear gradient” (arrow 2). Finally, make sure black is set as the foreground color (arrow 3).(Oooop, I have white as my foreground color and I had to change it before proceeding. The keyboard shortcut X easily switches the foreground and background colors.)
On your layout, click where you want the fading to start and drag to where you want it to end. The shorter the distance you drag the more abrupt the fading, and the longer distance you drag the more gradual the fading. Try it again and again dragging in different directions, even at angles, until you achieve the look you want. Here are a couple different results.