Sometimes you want to focus attention to a specific area of your photo. Applying a vignette that darkens the edges a bit directs the viewer’s eye where you want it.
Step 1: Open the photo to which you want to apply the effect.
Step 2: Go to the Layers palette and add a new layer by clicking on the Create a New Layer icon at the bottom of the palette (the square one with the upturned corner). Press the letter D to set your foreground color to black and then fill the new layer with black by pressing ALT-BACKSPACE (Option on the Mac).
Step 3: Click on the Rectangular Marquee Tool (keyboard shortcut M), and drag a selection about 1″ or so inside the edges of your photo. We want to greatly soften the effect, so go under the Select menu and choose Feather. In the dialog box enter 50 pixels for a low-resolution photo (or 170 pixels for a high-res, 300 dpi photo), and click OK.
Step 4: Now that the edges are softened, all you need to do is press Backspace (Mac: Delete) and you will knock a soft hole out of your black layer. Your photo on the bottom layer will show through. Now press Ctrl-D (Mac: Command-D) to deselect. Most likely this will be a little too dark, so you can lower the opacity of the layer in the layers palette (a good number would be 60-70%; the example is at 79%).
Here are the before and after photos: