Advanced Blending

What we have here are two layers, one with a space scene on it and the other with a nebula type thing
against a black background that we want to blend with the first layer -

We could use the Screen Mode -

But as you can see, it leaves a visible edge plus, in some cases the object itself almost disappears.

A much better way of doing this is to use one of Photoshops little known and little used feature's that can be found in the Advanced Blending section of the Layer Styles dialog box. First turn off the background layer, then double click on the layer (in the Layer Palette) you want to blend. This will bring up the Layer Style dialog box, make sure Blending Options: Default is selected over on the left -

The bit we are going to use is the upper of the two sliders at the bottom, the one that says - This Layer:
You need to gradually move it over to the right until you see most of the black disappear. Its looks OK'ish, but it's bit rough and pixilated -

The way to smooth things out is to hold down the Alt key and move the slider further over to the right.
This time only the right hand side of the slider will move and the remaining black will smooth out and fade.

Don't over do it!

All that remains is to clean up with the eraser, adjust the size and opacity and you're done -