The effect or technique is called "Orton", named after the person who developed it. It comes from the the older slide film technology. Essentially you take one image overexposed by two stops. Then you take a second image of the same scene about one stop overexposed, but this time completely out of focus and usually with minimum depth of field. Then you sandwich the two slides and rephotograph the two, thus creating one image.
With post processing in photoshop, you do the same, but you use two layers or two images and blend them, where one is superimposed on the other. There are a number of ways to do this in PP, but it depends on what program you are using. Here is one from Andre Gallant site, which by the way is a very good site. He uses Photoshop.
Andre Gallant - Montages in Photoshop
JMR
