Photoshop cropping question

I hope this is okay to ask here. Moderaters, feel free to move/remove.

I know this should be super easy, but I just can't figure it out! How do I get the white/grey edges to not show from around my crops? I am using the cookie cutter tool to crop (Photoshop Elements 6.0) and I've tried to crop before and after I put the cropped photo on the background photo, and no luck. Is there a simple way to fix this? I've even tried to "erase" that edge, and it doesn't erase!

Thanks if anyone can help!

http://i118.photobucket.com/albums/o...Composite1.jpg

Why are you not using the crop tool?
I've never used the cookie cutter so don't know much about it.

Doesn't the crop tool just do squares/rectangles? I used the cookie cutter because I can crop with that jagged edge (in this instance, but you can crop all different shapes with the cookie cutter tool).

I figured it out! It looks like my background wasn't transparent to start with... I've been banging my head against the wall about this for days!

Thanks for the reply Frog!