With version 1.3 onwards it is now possible to fade out the edge of one source image. This means that the other source image becomes more dominant towards the edges. It is only possible to fade one of the source images, not both.

If there are two source images: the lion and mona.

Then this image can be created by fading one of the source image edges. The buttons for this feature are in the merge dialog box.

Check out any of these images by clicking on them.