[Fading with geometric patterns?]

Is there a way to accomplish a gradient fade using geometric patterns (circles, squares, etc.) to fade one image into another image or into a solid color (example image attached)? Perhaps a plug-in has been made to accomplish this feat or somethhing similar?

 

Any help is appreciated!

[What is an "11 File"?]

Perhaps someone here could help me. Every time I save a file (even when I indicate that it is to be saved as .jpg, .png, etc.) it saves my file as an "11 File". I don't even know what an "11 file" is, much less why the program insists on saving every file as this type.

Could somebody help me as to why this is happening? Thanks, folks!