Here's how I do it:
Select the Lasso tool.
Use it to draw round the outline of the part of the image you want to isolate.
Right-click. Select 'Feather' and choose a suitable value. (Try 5 or 10 to start with, depending how soft you want the edge to be. You can always go back one stage on the History Palette, and select a different value, if you don't like the result).
Right click again, and choose 'Select Inverse'.
Click on the foreground colour box, and select the colour you require to surround your selection
Go to Edit > Fill and check that 'Foreground colour' is selected, the mode is 'Normal' and the opacity is 100%. Click OK.
That's basically it, but you might need to use the paint brush or clone stamp to tidy up the edges.
That's not the 'textbook' technique but it avoids messing around with layers, which probably makes it easier for a Photoshop novice.
Chris