hhmm... i don't have PS on this machine, but as i can remember, you should load the layer as selection (ctrl click on the thumbnail of the layer) and play with the FILTER -> BLUR tools... but the gaussian blur, is not the best way if you want to blur only the edges... that tool works on the whol selection, or work area... but the easiest solvation is the simple blur tool, with a mid-tone hardness, and a very big diameter... and playing with the mouse... and don't forget to give him some cheese after it
xD
if you want your 5-4 pictures to be blured into the other, you'd make the upper pic a bit larger, and /w the blur tool blur it's edge. Than use the eraser tool about 150-200px and 0% hardness. this will make an efect of disappearing of the pict over the other.. now blur the lower picture's edge, and you're done ^^,
i hope you see what i mean and it was a good idea for you... 