Next, in the Layers Palette on the right side of the screen, select the layer named Sharp and change its blending mode from Normal to Screen. You won't see anything change because the top layer is obscuring the view, but what we did was to simulate overexposing the bottom layer. You can see this for yourself by temporarily turning off the top layer so you can see through it. To do that, click the Visibility icon--shaped like an eye--to the left of the top layer. You should see the photo get brighter. Turn the top layer's visibility back on when you're satisfied.

Now let's combine the bottom two layers. Select the Sharp layer, right-click, and choose Merge Down. You should see the bottom layers combine into one.

We just need to blur the top layer, and we're done. Select the Blurry layer and then choose Filter, Blur, Gaussian Blur. This is where you can apply some artistic judgment: Use enough of the effect to obviously blur the scene, not so much that it renders the entire photo and all of its details completely illegible. I can't suggest a specific value, because Gaussian Blur's impact varies depending upon the resolution of the photo. But as a rule of thumb, you might want to start around 14 and see if you like the effect.

Now, with this layer still selected, right-click it in the Layers Palette and change the mode from Normal to Multiply. You should immediately see the effect.