1. So open up some image. I'll use this just made sig example for this tut.

2. Firstly make a new layer and then take your "Paint Bucket" tool and choose from fill type "Pattern" and fill the image with that pattern.

 

 

3. Then go to Layer-->Layer MAsk-->Hide All.

And the pattern disappears.

4. Then take your "Gradient Tool" and press "d" to put your colors to default. Then just click somewhere and drag so you'll have a fading pattern like this one: