Tutorial: Quick and Easy Torn Edges in Photoshop and Photoshop Elements

Use the lasso tool to draw a jagged line on the object where you want the torn edges. Complete the circle by continuing outside of the object until you join with the beginning and the area is selected. Hit Delete.

With your mouse inside the selected area, drag it and move it up slightly to select the area you want to look torn.

Choose Filter> Noise> Add Noise. Adjust the level and hit Okay. The level will depend on your colors and textures.

That's it!
Optional: You can use the eraser tool with the opacity lowered to make the edges a little see-through if you want, I rarely do. Add a drop shadow for realism.

Examples:

To make the photo appear torn, I used the same procedure. Then I used the dodge tool to lighten the torn edge so it appeared white, like the inside of a photo.