I am not too sure how much different PSE8 is, but I have PSE5! I use the blending options, pin light, soft light, overlay... like HERE
. Mess with those. Sometimes I lower the opacity too. Also, you might have to do some erasing (using a brush) to get your edges blended well. Lowering your opacity of your brush helps too! Hope this helps!
That is how I do it. Would love to hear if anyone else has a different way!!