How to Cut a Shape Out of a Picture
(i.e. high-tech cookie cutting )
First off, I did this in Photoshop CS3, but if you have Photoshop Elements, you can just use the Cookie Cutter tool
- Start up Photoshop, and open the picture you want to take from (Click here for the image I use in this tutorial)
- Convert the image to a layer (if it already isn't) by double-clicking it in the Layers palette and pressing ok in the box that pops up
- Create a new layer by press the button in the layers palette
- Click the Shape icon (on the Tools bar that's usually on the right....if not, click Window >> Tools to make it appear) and draw the shape you want cut out of the image
With shape on it: 
- I'm going to use a rounded rectangle in my example
- It doesn't matter what color its fill is right now, don't worry about it
- Right click on the shape layer in the layers palette (Window >> Paths if it's not there already), and click Blending Options
- Drag the Fill Opacity (diferent from Opacity) down to 0% and press Ok

- Go back to the Layers palette, except this time you'll click on the Paths tab, then right click on Shape 1 Vector Mask, press Make Selection... , and for settings use the following:
- Feather: 0
- Check Anti-Aliasing
- Under Operations, check New Selection

- Select the layer for the image you originally opened, then click on Edit >> Copy (Ctrl + C)
- Open a new image with a transparent background, and click Edit >> Paste (Ctrl + V)
>>
Click Here for the Final Product <<
The End!