In the past days I’ve spent some hours with Illustrator to create an overview image of our research activities. The result is now on our group homepage, I used opacity masks extensively.
What you basically do is to draw a rectangle and apply a gradient filling (either linear or radial). You then move this rectangle over your image and select “Make Opacity Mask” from the “Transparency” toolbox, which is one of the sliders below the color swatches. The two objects are combined and you get a nice transparency gradient. I used linear gradients for blending the single images and a radial gradient to create the overall shape. One trick to overlay multiple linear gradients is to select another blending mode. The “Normal” blending mode means that the object in front covers all other objects. Select “Multiply” to overlay multiple masks (same “Transparency” toolbox as used before).