Open image. (a horizontally dominant image works best for the miniaturization look than images of tall things.)
Press q to enter quick mask mode.
Press g to select the gradient tool (it shares the same button as the paint bucket so make sure it's on the gradient tool)
Click and drag on your image to mask an area you want to be in focus.[indent]Tip: The first click is the
center of the area that will be masked.
Release the mouse button after the desired area is covered. (Press shift to get a straight vertical or horizontal line.)
The area will now have a red hue indicating the masked section.
If you are satisfied, continue. If not ctrl+alt+z takes you one step back to reselect the mask area.
Press q again to exit quick mask mode. You will now have the "marching ants" on your image.
Filter > Blur > Lens Blur (default values are good, but feel free to explore the space. Watch for more cowbell.)
Viola! You have just mini-ized an image!
(The tutorial I found also recommends Image > Adjustments > Curves and/or Image > Adjustmens > Hue & Saturation to create impacting colors.
If you want pretty pictures of what is where in Photoshop:
here.
With just a cursory glance at some flickr photos of tilt-shifted images, I've discovered what looks best to me is having a small blurred section at the bottom of the image. But, it's art, so mileage is different.