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I am making a collage of my soccer memories, for PERSONAL usage.  I have attached the soccer logo.  If I paste it on a black background, how do I make it so that the black background is almost "eating away" the picture?  The effect can be seen here:

[ATTACH]56920[/ATTACH]

(the black background eating away the Canada flag, but I want it to look like the black background eating away my attached logo).

By the way, I use Photoshop 7.0.  (I know... I currently can't afford a newer version until I get a better job.)  Please can you help me?  I don't have to get the exact effect.  I just don't want the edges to be blunt when I paste this on a black background.  Any effect you think looks nice will do.

Thanks a lot.