if you create a new layer over the picture you want to fade and make it completely white. then on your new layer press CTRL+ALT+G, That makes a clipping mask.
And then you just "paint" with the color black on the things you want to be faded.
White = Original picture
Black= Eraser.
I hope it made a little sense,
Oh, use the brush on the clipping mask and not the picture itself.