Okay, I worked out how to do the same thing in GIMP 2.2, here's what I did:
Adding a hazy border to an image in GIMP:
1.Open the image.
2.Choose the rectangular selection tool.
3.Select the whole image. (Select - All)
4.Shrink the selection. (Select - Shrink, set the number of pixels, tick 'shrink from image border')
5.Invert the selection. (Select - Invert)
6.Blur the selection. (Filters - Blur - Gaussian Blur RLE set to 10 pixels for example)
7.To lighten the selection use Tools - Colour Tools - Brightness-Contrast and adjust the sliders to suit.
8.Deselect. (Select - None)
9.Save.
Some of the selection options are available on buttons in the 'Selection Editor' window. (Dialogs - Selection Editor)
If a softer edge to the border is required, after step 5 choose Select- Feather and set the feather to 20 pixels for example.
Alternatively you may prefer this effect:
1.Open the image.
2.Select Script-Fu - Selection - Fade Outline.
3.Set the border size and adjust the fade sliders if required. Leave the tick boxes as they are and click OK.
4.Open the layers window. (Dialogs - Layers)
5.Create a new layer (click the new layer button) and fill it with white.
6.Drag the new layer below the original.
7.You may want to select a colour from the image to fill the new layer.
8.Save.