Well...I can't answer your avatar question...but for the blend, here's how you do it (or atleast how I do it....using PSP 7):
After you make the blend, make sure all the layers are merged, copy to whole blend and paste as a new layer. Go to "Effects" -> "Blur" -> "Gaussian Blur" and set the settings to anywhere between about 5 & 15. Then just arrange the transparency levels to lesson the soft, foggy effect!
I hope I made sense...I'm not really the best at explaining these kinds of things!
A site with some good blend tips are...
Pinoy 7 Blenderific
Later Skater,
Courtney