Q: How do I make a layer gradually fade to reveal a layer beneath it?
A: Use a Layer Mask; On your top layer, select Layer>Layer Mask (Reveal all or Hide all), then select the Gradient Tool, and make a black & white gradient on the layer mask. The layer mask is the white thumbnail to the right of the layer thumbnail in the Layer Palette, and must be selected before applying the gradient.
Depending on your settings, white is 100% opaque, and black is 100% transparent. 50% black is 50% transparent etcetera. You may also use a regular paintbrush on the Layer Mask.
A2: Use Quick Mask; Hit Q on your keyboard, then make a black and white gradient with the Gradient Tool (your image will turn red to show you the mask). Hit Q again. You can now either make a Layer Mask from this selection (Hit the Add Layer Mask button on the bottom of the Layer Palette), OR you can simply hit the delete button on your keyboard (note that deleting is destructive compared to a Layer Mask).