I've been trying to recreate a fading drop shadow like the one at the site below... but I cant seem to figure it out. Any one know how to do this in photoshop???
http://www.suspiremedia.co.uk/index.shtml

I'm not positive this is the best way to do it, but....

I created a rectangular selection the size of the box, and filled it with a gradient.
Then applied a Gaussian Blur.

I attached the PSD so you can see the layers.

It's not perfect, but you get the idea.

OMG!!! Why didnt I think of that!?? Thanks... I got close, I tried it with a gradient stroke... but it didnt look that good.

thanks again!!

No worries.

There are several methods, as always with Photoshop. The method above is a good one. You can use the layer styles drop shadow too. With the layer styles palette open and the drop shadow options up, you can use your move tool to pull the shadow the way you want it. Adjusting the opacity downward for a more subtle shadow.

For 'custom' shadows, I'll usually make a new layer for the shadow then use a big soft brush, set to a lower opacity and flow and 'paint' in the shadow. You have a lot of control with this method too.