Just thought of a way to make it a bit less foggy:
1/ Open a new document and set it to white. Size doesn't matter. Click on the icon (see image above) to set foreground colour to black and background to white.
2/ Take your selection tool and look at the toolbar: make shure that anti-alias is unchecked
3/ Drag a selection on the document, and make it not too small. You see the marching ants. Every pixel inside the marching ants area will be changed by whatever action you undertake. So take your fill tool (the bucket) and click inside the selection. Immediately it will be filled with the foreground colour, black. Click Ctrl/Cmd and Z to undo the fill. You're back at the white doc.
4/ Change to Mask mode (see images above. To be more correct: this mode is called QuickMask mode). You will now see that the area which you selected is still white, while the area that you did not select is covered by a reddish veil. This colour red can be changed if you want to, and its transparancy also, depending on your needs.
5/ Now click on the Selection mode button (see image above) to go back to the selection, and the marching ants will be there.
6/ Now go to the Selection menu, and choose Feather. A dialog box opens and you have to enter some number. Take a big one, say 50 pixels. This means that your selection will be fading gently into the background. The marching ants don't really show this because they can't. Follow the same method from above and fill with black. You will see that the black
really becomes grey at the borders of the selection and faces into the white. Ctrl/Cmd+Z to go back to the white document.
7/ The selection/marching ants can't show you this transition area, but a mask can: change to quickmask mode, and you will notice how the red veil slowly fades into the white of the document, indicating that there is an area that will be gradually influenced.
8/ Now take your brush tool and draw some lines on your mask (also inside the white area).
-When you draw with black, you will add to the red veil.
-Click the small icon to toggle foreground and background colours and draw with white. You take a way from the red veil.
-Now doubleclick on the foreground colour icon. The colours palette will open. Go to the boxes that say R, G, and B. These tell how much red, green and blue is in the colour. Fill in for each one 170. When these three values are identical, you have a grey. This one will be light because the values 170 are rather high. (0 is the minimum, and 255 is the maximum). Add some lines with this grey in the white area.
9/ Click the small icon once again to go back to black foreground and white background colour.
10/ Click back to selection mode and look at the marching ants. They may well follow another path now.
12/ and finally, take your paintbucket and fill the selection with black. Click Ctrl/Cmd+H to hide the marching ants and see what you did to the real selection by painting on the mask with white, black and a grey.
hope this clears things up a bit...