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Create a halftone border in Photoshop.
Add a halftone drop shadow using Photoshop.
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How'd They Do That? - Customized Stencil
In just a few minutes you can create this cool stencil effect on any image. Simply follow the steps below. 
June/July 2005
Technique used in “7 Steps to Innovative Binding” Greater Des Moines Chamber of Commerce brochure, V10N2
1. Download Tinsnips, a free font from www.fontface.com.
2. In Photoshop, open a new document and name it Layer 1. Type in a word to stencil. Select Layer > Rasterize > Type. This will allow you to select each letter separately and move it around or rotate it.
3. After you have positioned the letters, select all the black by Command-clicking Layer 1. Choose Select > Inverse. Create a new layer named Layer 2. Using a wide paint brush tool set to Dissolve, color the letters in Layer 2.
4. Delete Layer 1 to get rid of the black boxed “stencils.”
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