how do you fade the sides on a picture?

like this one:
http://img.photobucket.com/albums/v497/spirock/006.jpg

what programs can you do it in?

The effect is called "feathering."

Paint won't do it, but I think just about any other graphics program or even photo-editor will.

For example, in Photoshop you use your selection tool, but first look at the bar along the top and set the feathering to the desired number of pixels. Then whatever you draw a selection around will have feathered edges.

If you can tell us what program you have, we can give you more specific instructions. ^_^

P.S. Where did you get the picture? It's adorable!!