These are general instructions; specific commands will vary, according to the image editing software you are using.
Select a photograph, crop and size it as you wish.
You can change a rectangular image to an oval shape (or any other shape) by following these steps:
Set the current color to black, then draw an oval sprite large enough to cover the photo and leave enough space around the edges to add transparency mapping, later.
Apply a gradient effect. The black areas will later become transparent, and the light or white areas, opaque. You want the white or light part of the gradient to map to the part of the image you want to keep.
Bring your photo to the front.
Center the photo and the gradient together.
With both selected, apply the gradient to the photo, using whatever command is equivalent to "map transparency".
Deselect the photo and the gradient. Move the gradient aside.
Your photo should now appear with the edges blurred out.