OH! Right up my alley!
In PS, you select the lasso tool, use a big feather (I use a 20 feather - up on the top bar), and then draw the lasso around just the subject. THEN, right click and select "new layer via copy" to make a layer on the top of the background that just has the subject. THEN... go back to your background layer with the whole image, and go into the filter>blur menu and I usually use a gaussian blur - blur to your taste (less is more, though). So, you're bluring the whole bottom layer, but the subject on top is clear. Then if you want, you can go back on the top (subject) layer and erase some of the edges......
Is that too vague? If you want more, feel free to holler!