Let's talk about using a photo mask. The coolest thing about this is, you can resize it any size you want.
Start at the bottom. You will have your background paper. I have included the one shown.
Then you will have your mask layer. (also included) Top will be your image.
You will need to group your image to your mask. This can be done a number of ways. Let's talk about a couple.
You can highlight your top image layer. Go to layer, create clipping mask. In Elements, it is Layer, group with previous. Or you can hold down your Alt key and click on the line separating the two layer and it will clip it together for you.
Make your image the size you want it to be. Now go down and highlight the mask layer. Use Ctrl T to free- transfom. You can rotate it, you can make it wider, you can flip it horizontal, etc. Put is so it is the same size as your image. Now you need to group them together. Try the Alt key trick. Highlight your image layer. Hold down the Alt key and click on the line that separates the image layer from the mask layer. It will group together. Look closely, the image layer now has a small arrow pointing down to the mask layer. :)
Now I tend to give my mask layer a slight bevel. This one has a bevel set at a 2 with a slight drop shadow.
Here is a screen shot, that should help. Do give me some feedback, if you like this?
I am not sure how long I will leave the download link up so grab it quickly.
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sorry... time is up.