Oh Ha!

Simple. This is the way I do it.

Start with black land on white sea:
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Duplicate this, and select by colour the black, then grow the selection by 1/2 the amount you want your fade to be (I used 30 pixels here), then fill with black.
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Go back to the original layer and select by colour the black again. Then invert the selection. Now Gaussian blur twice the pixel size you grew the selection:
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Invert the selection again and fill with white Though this is purely optional if you are most likely to have a land layer above:
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Now select None, and use levels and adjust the gamma (middle slider) or use curves and drag it up an down until you get the fade out you want:
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That's it!

-Rob A>