Step 3
On your Layers palette, highlight the Raster 1 Layer:

Selections > Load/Save Selection > Load Selection From Alpha Channel... > Load
Selections > Modify > Contract > Number of pixels: 8 > Okay.

Now a little bit of a tricky spot.
Use the Move Tool (M) and move the image toward the upper left corner. The idea is to line the image up with the lower right hand selection like this:

Selections > Modify > Feather... Number of pixels: 18
Now hit Delete on your keyboard:

Now just a quick note here.. if you want more or less of an outline along the bottom, just hit Ctrl Z on your keyboard twice ( once to undo the delete, and once to undo the move) and re-position the image where you would like it. Then feather and delete ;)
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