How to get an effect like this?

[A_Pickle]

That is, I believe, known as a "viginette" effect. Anyways, you'd create a layer atop the background (base image) layer, and fill it black.

Then, with the "Ellipse Select" tool, you'd select a circular portion of the middle (of the black layer), and push delete to cut it out. Then simply apply a gaussian blur appropriate for the effect.