This simple technique uses the same photo twicenext year's Christmas card, possibly?
Here's the original photo I used in my example.
Press Command-J (PC: Control-J) to duplicate the Background layer. Press Command-T (PC: Control-T) for Free Transform, and then hold down Option and Shift (PC: Alt and Shift) while you click-and-drag a corner handle to scale the copy down to the size you want. Don't commit your transformation yet, though.
After positioning the copy layer where you want it, press Return (PC: Enter) to commit the transformation. Command-click (PC: Control-click) on the layer thumbnail to load it as a selection.
From the Select menu, choose Transform Selection. Press-and-hold the Option key (PC: Alt key), click on one of the side handles and drag the selection to make it the width of your photo. If you want, use the same method to make the height of the selection slightly bigger than the small photo. When it is the size you want, press Return (PC: Enter) to set the selection.
Command-click on the Create a New Layer icon at the bottom of the Layers palette to add a new layer below the copied Background layer. Press D to set your Foreground and Background colors to the default, and press Command-Delete (PC: Control-Backspace) to fill the selection with white. Lower the Opacity of the white layer to around 3040%. Press Command-D (PC: Control-D) to Deselect.
Click on the Foreground color swatch at the bottom of the Toolbox and choose a color that will complement your photo. With the Type tool (T), click to the right of your small image to add a Type layer with whatever wording and style is appropriate for your photo.
Here I applied a slight Gaussian Blur (Filter>Blur>Gaussian Blur) to the white layer to soften the edges, and a Drop Shadow layer style to the text.
In this case, I duplicated the Background layer, applied a Gaussian Blur, and lowered the opacity to create a soft focus effect on the background photo.
Here's a different photo that uses a vertical format and blue as the color of the rectangle.