These two samples iilustrate the difference between blended and unblended edges, as set on the Spacing, Background, and Edge Handling window. Another example can be found here.
The big difference is that when you look at a collage with unblended edges, each image stands out, whereas a collage with blended edges comes across as a single image. After adding blending to Easel, I began using it all the time, but have since backed off considerably. The overall effect is very different; sometimes you'll want to blend, other times you won't.
Here's the upper left corner of a vacation collage I did, as it looks with unblended edges and the spacing between images set to 2 pixels:
and here's what it looks like with edge blending turned on: