PICTURE BORDER
Open a new image, and make sure that it's on a normal, not a background layer. If the image you opened has a background layer then select all (CTRL+A) and copy (CTRL+C). Make a new image (CTRL+N) with default settings. The size of the image will be already set to the picture size you copied to the clipboard previously.
Using the rectangular mask select the object of your image. Then enter quick mask (Q). The image around the mask will turn red, which means that it's protected. Now that border acts like every other thing in photoshop, which means you can distort it, or paint on it.
Start the Wave filter (Filter/Distort/Wave) and set the filter properties to create a similar effect like shown in the image to the left. If neccessary, apply the filter 2 or 3 times. The important thing is that you experiment with the filter settings untill you get the effect you want. In this case the wave filter was applied twice.
Exit the quick mask (Q) and invert the selection you get from Quick mask (CRTL+SHIFT+I). Clear the selection you inverted (Del). There you have it.
You can also apply a different distort filter to the quick mask... It's your choice. I chose the Wave filter because it's best to distort the edges (gives the most obvious result).
To make the image look better you can add a backgound layer, fill it with your favourite color or texture, and maybe add a shadow to the picture with borders. You probably know how to create a drop shadow effect, so I won't bother you with it, but if you don't know you're probably... um, never mind, just look at some of the previous tutorials :-). You can see the effect with background layer and a drop shadow on the final image below.
