Apply Blur (Filter - Blur - Gaussian Blur, or Filter - Blur - Lens Blur) to selected image (you will need to merge your layers, so that entire wallpaper is in one layer). Experiment with blur size - 20-30px should be OK.

Missing Piece - making of - Step 21

Enjoy!
See wallpaper.

That's all!

Author: Vlad Gerasimov
URL:    http://www.vladstudio.com