Here is the layers window, with most everything labeled. I never change the fill of a layer, or create new sets, so I haven't labeled those since I won't be talking about them.
So, I'm going to start with the first picture I'm using in the collage (just random Eternal Sunshine caps), but I'll show how I clean up an image first. Here is the image, resized. Go to Image > Image Size. Make sure the width and height are connected by a bracket and a paperclip. Just change one number, the other will change so that the picture stays proportional and doesn't go all wonky and stretched. If you were starting with a large image, and after the resize it's reallllly tiny, go to View > Actual Pixels.
The larger the image, the more blurry it will get after you resize it down. Unless it's a super-high-quality picture, it's harder to resize a picture up. Go to Filter > Sharpen > Sharpen.
I usually only sharpen once, unless I'm going for a grungy look. This particular image is wide enough that I don't need to do anything else. If you're using a close up of a person's face, their skin might look a bit pixellated after a sharpen, so use the blur tool, set to a small round brush at about 30% strength (you can change these settings in the top menu), and carefully smooth out the skin, taking care to not blur the edges of any facial features.
The next step is to brighten the image. Take your sharpened background, and drag that layer down to the new layer icon in the bottom (the page with a corner turned), and make two duplicates. Or, you can highlight the background and go to Layer > Duplicate Layer. In your layer window, you will have two background copies. You can rename layers if you want to. Take the bottom duplicate, and in the blending menu (which now says "Normal") and change it to "Screen." Then go to Image > Adjustments > Brightness/Contrast. I take the brightness down by 10-15, and the contrast up by 20-30, depending on how bright the image was to begin with. You can hide the top duplicate to see what it looks like by highlighting that layer, then clicking the eyeball off.
Next, select the top layer, the second background copy. Change the blending to "Soft Light." Go to Image > Adjustments > Desaturate. That makes this layer black and white. What this effectively does, by having it on soft light, is bring out the outline of everything in the image, so it's better defined.
Select the bottom background copy. Create a new layer by either clicking the icon in the layers window, or going to Layer > New > Layer. Change your foreground color to a dark blue, like #07214D. Using the paintbucket, fill in the new layer (make sure it's selected in the layer window.) Set that new layer's blending mode to exclusion. This layer should be in-between your two duplicated layers.
At the very top, create a new adjustment layer, either using the icon, or going to Layer > New Adjustment Layer > Selective Color. Change the top menu from Reds to Blacks, then take the Blacks up by 10-20%, depending on how washed out the image looks. This selective color adjustment layer should be on the very top. You don't need to change the blending mode from normal. It doesn't change this particular image a lot, but I always do it.
If your image was very dark, you might want to duplicate your background copy layer set on screen once or even twice. I don't need to here. Now, I'm ready to move my cleaned up image into my collage. I can do one of two things. If I think I don't need to do anything else, I can merge my layers down. Layer > Merge Visible. That compresses all your layers down into one. I don't like to do this, though, because then you're stuck with one layer and can't go back to tinker. So I create a new layer on top, and then go to Image > Apply Image. That fills the top layer with your complete image as you see it, but lets you keep the work you've done if you decide to go back and change things later. Here's what my layer window looks like now.
I select my applied image layer, and then go to Select > All, or Control-A. Then I go to Edit > Copy. I need to create a new document for my collage, so I go to File > New. I set the height and width for this at 500 pixels. Make sure the resolution is 72 pixels/inch. I set mine at background color, which is black.
I place in my first picture into my document by going to Edit > Paste.
I can use the move tool to move the layer where I want it. In your layer menu, you can see the background, then the image you've just pasted in. I rename my layer so I can keep track of what everything is. I'll call it "Bed." After I fix up another image, I'll paste that one in too, and start blending images together.
Here's my second image pasted in. I want the bed picture to be on top, though, so I just highlight it in the layers menu and drag it to the top.
I don't like that it's smaller, so I'm going to make it the same size as the other picture. I go to Edit > Transform > Scale. I pull from the corner, and hold down the Shift key while I scale so that the picture stays in proportion.
It's gross and blurry. That's why resizing up doesn't always work. So I'm going to actually go back and redo that picture from the beginning, and repaste it in.
Much better. You can move layers off the actual document if they're too wide, like I've done with the new bed image. Now I'm going to blend them. Make sure the pictures overlap. In the layer window, highlight the image that is on top. For this one, I'm going to use the rectangular selection tool, with a 10px feather. I select on both sides on the join.
Then I hit delete.
By changing how wide I make the selection, and how large a feather I set, I can determine how gradual or abrupt the blend is. You may have to play with it, and keep using Edit > Undo to fix things.
Once I get the blending I want between images, I bring in my next photo. I move around my layers to get the positioning I want, by selecting each layer and then using the move tool to place them in the document.
I blend the top layer onto the bottom two the same way I did before, selecting horizontally this time instead. Make sure you have the right layer selected; the top layer is usually the one you want to blend into the bottom layers.
The blend between the top and bottom pictures is kind of boring. Blends don't work as well when you have a large contrast between light and dark, like here. I'm going to use a layer mask to get something a little more interesting. Highlight that top layer, then click the layer mask icon in the layers window (the rectangle with a circle in the middle). Make sure the colors are black in the foreground and white in the background, then select a brush. I'm going to use one of the Special Effects brushes that comes with Photoshop. I'm just going to brush straight across from left to right once.
You can see the edges of the bottom photos through the brush, so I'm going to go back and hide those. By clicking the arrows next to the colors in my tool window (to change the white to foreground), I'm going to pick another brush, one of the big Natural Brushes, and re-brush in the top photo to hide those edges.
All that's left is to make it a clean square, so using the crop tool, I'll select the part of the document I want and then go to Image > Crop. Make sure it's not set to a specific number of pixels or inches in the toolbar so you don't mess up your proportions.
Here is my layer window as it is now. You can see what the layer mask looks like on the top layer.
Now's when you do any effects you want to go across the entire collage. Do everything on a new layer, so if you change your mind, you can delete or adjust specific effects, and not everything at once. I'm going to create a new fill layer, using the icon in the layers window or going to Layer > New Fill Layer > Gradient. Photoshop comes with certain gradients, or you can make your own or download them. Here is the one I am using.
I change the blending mode to Color, and reduce the opacity to 60%.
That kind of washes the image out, which is okay for now, but the colors aren't bright enough for me. I'm going to duplicate that gradient (drag it down into the New Layer icon or select it and go to Layer > Duplicate Layer), and then change the blend mode from Color to Hard Light, keeping the opacity at 60%.
I like those colors, but it's still a little washed out for me. I create a new layer at the top, fill it with black using the paint bucket, and then set it to Soft Light. That's perfect for the top, but still a little dark at the bottom.
I keep that layer selected and put on a layer mask. I click and hold the paint bucket to reveal the gradient tool. I click on the representation of the gradient up in the toolbar to bring up the gradient editor. I choose the one that says "foreground to transparent," then click okay. I make sure my foreground color is black. Then I draw the gradient from the bottom to the top. What this does is erase that soft light layer from the bottom while gradually keeping it at the top, so it's a smooth erase of that layer from the bottom. (I hope that makes sense.)
I like to use brushes for texture, but I've downloaded most of mine, as I don't find the generic Photoshop brushes work for me. You can skip this step if you want, but I think brushes are what really make it interesting. I'm going to use some watercolor brushes and some paint splatter brushes here. I either use white, or select a light color from the document. Always use each brush on a new layer, and experiment with different blending modes and opacities.
I find that using brushes helps unify a collage, when you place them over more than one picture. It just kind of brings everything together. You can make them as subtle or obvious as you want.
One of the last things I do is text. dafont.com is a great place to find really cool fonts for Photoshop. I'm going to use one here called LainieDaySH. I'll pick a color from the document using the eyedropper, and type the text in. Placing text over the blending points in a collage helps disguise them even more.
This text stands out pretty well, but sometimes it's hard to read. That's a good time to use a drop shadow. Make sure your text layer is highlighted, then go to layer styles, using either the icon at the bottom of the layer window or going to Layer > Layer Style > Drop Shadow. Change the distance or the size to get the kind of shadow you want. I'm using a distance of 5 and a size of 2 here.
I made two text layers, to change the size and location. I find that's much easier than trying to do everything at once. Since I want the exact same shadow on the other text layer, I'm going to copy and paste it. Right click on the text layer with the drop shadow and select Copy Layer Style. Right click on the second text layer and select Paste Layer Style.
The last thing I do is put on a border. You can do a simple, one-pixel stroke around the outside if you just want something quick and clean. Create a new layer on top, then select all. Then go to Edit > Stroke, and select a 1px stroke around the inside of the layer in the color you want. Here's a 1px stroke in a light blue from the image.
I'm going to do something a little fancier. I'm using a border brush I downloaded, changing the size from 100x100 to 500x500 to fit the image. You can also just place the brush in the center, and then Edit > Transform > Scale to make it fit the image. Here, I've used a border brush and scaled it to fit. I used a dark blue and then changed the blend mode to Color Dodge. Because it doesn't meet the edges completely, I've kept the 1px stroke border.
And that's it. Here's a final look at my layers window. The seemingly blank layers in the middle are my brush layers, which when using light brushes don't show up very well.