First we'll go from this to this:
Then we'll take this and this to make:
-Get your picture and resize it. Paste it onto a new 100 x100 canvas. Position it where you like.
-Duplicate your base and set it to Screen 20%.
-Put this at Darken 20%.
-Duplicate your base and drag it to the top. Set it to Soft Light.
-Put this at Exclusion 67%.
-Duplicate the Soft Light layer and drag it to the top. Desaturate. Duplicate that layer as many times as you want to get your darkness the way you want it. You could also go to Image>Adjustments>Variations and click darker if you want.
Lighter pictures don't work that well with this tutorial (as I've experienced), so I'd stick to darker images. ^__^
-Get two images. Make sure one of them is mediun and one is semi-small.
-Use this tutorial on both pictures. Don't do the scanlines. Unless you want to, then go on ahead, I have no control over your urges. haha.
-For the smaller picture I put in a screen duplicate of the base. Only do that if it's too dark.
-Desaturate the smaller image. Copy and paste it onto the other image. Position where you like.
-Go to your eraser. Choose ripped paper edges instead of a circle or square. Erase around the smaller picture.
-Make sure you have the smaller layer still selected. Go to Edit>Stroke. Choose a light -ish gray. Make sure it's stroking inside. 5px.
-Edit>Stroke once more. Choose white. Make sure inside is selected. 2px.
-Add text, brushes, etc, and you're done!
I hope those were easy enough to understand. Feel free to ask me questions if you have any.
I'd love to see what you get! =]