Out of all the techniques I use, this one is my favorite and a really quick one that looks professional. Good to have in the bag of tricks. This looks hard but is very easy.

1) Open the picture or graphic that you want to make a selection from.

2) Click the freehand selection tool. Set feather to 20. Draw your selection holding down the left mouse button. Let up on the left mouse button and you should see the the marching ants indicating your selection. If you don't like it, hit undo and try again.

3) Once you have a selection you like, click Edit > Copy or Ctrl + C to copy your selection.

4) Open a new file. Mine was 300 x 300 with a transparent background.

5) Add a raster layer. Flood fill this layer with the color or background you want the picture to blend with. I chose the background color of my site.

6) Add a new raster layer.

7) Paste your selection onto the new layer. Edit > Paste as New Selection or Ctrl + V. You can use your mover tool to move it where you want.