Thanks for the comments Lon and Janet. Here's how I did it:
1. Duped the background and desaturate.
2. Used Smart Blur (I left it at the suggested settings).
3. Duped the Blurred Image.
4. Used the Poster Edges filter (Edge Thickness: 5, Intensity: 1, Posterization: 5)
6. Highlighted both layers and copy to a document in which I had a picture of old paper (downloaded from
www.sxc.hu. Deleted the border around this layer.
7. Changed the blend mode on the Blurred layer to Color Burn, created a layer mask and used the gradient tool (black to transparent) around the edges.
8. Changed the blend mode on the Poster Edges layer to soft light, created a layer mask and used the gradient tool (black to transparent) around the edges.
9. Converted these two layers into smart objects, highlighted both and transformed them to fit the "old paper" layer, and created a group of these two layers.
10. Duped the "old paper" layer, desaturated it and used levels to increase the contrast.
11. Highlighted the highlights of this layer.
12. Created a layer mask for the group I had created. This used the highlights that I had just done to add more fading to the picture.
13. Lowered the opacity of the group to 40% and the desaturated "old paper" layer to 80%.
14.Created a new layer underneath all these layers and filled it with black.