OK, the outline is going to be easier than I thought. Mention cutting around hairlines, and a lot of photoshoppers run for cover, lol
Make your selection around your outline as accurately as you can. If it were me, I'd use the pen tool- but the lasso or magnetic lasso will work as well. Here's the trick to a nice smooth transition- once you've made your selection, go to Select> Modify> Expand and expand the selection by about 3 pixels. Next, go to Select> Feather and feather the selection by about 5 pixels. The values can be fudged a bit, but that's right around the area you want- 3 and 5, 2 and 4- somewhere in there. This will create a gradual transition into the new background.
Now, on the shadow- no plug-in needed. Look at the modifcation to your image below:
I used the elipse tool to create a selection ( I made the selection more obvious for the sake of discussion. Next, I went to Select> Feather and feathered the selection by about 10 pixels, to create a smooth transition from light to dark. I copied the selection to a new layer ( Layer> New> Layer via Copy), then went to Layer> New Adjustment Layer> Hue/Saturation. In the dialog box that comes up, be sure to check the "Use Previous Layer to Create Clipping Mask" box. This means that you're only modifying the selection. Click OK, then turn the "Lightness" bar down to darken the area. You also want to turn the "Saturation" bar down some (The eye sees darker objects as having less color).
Of course, you'll want to make a more accurate selection for your shadow than I did, but you get the idea.
Hope this helps you. If you have any questions, feel free to ask.
-Medley.
There are only 10 types of people in this world- those who understand binary, and those who don't.