Open the render.ufo in PhotoImpact, you will find two elfs one is standing with a lathern in hand another is sitting. Open the photo.jpg and copy and past standing elf image on photo. You will need to resize photo as it is too big. Then position your poser figure as shown. Copy and past the sitting elf on photo, you will need to make it smaller just a little bit and position it on the stone as shown.

Now we need to make a little fixing on little elf. As you see below in image with arrows there are two places to fix. For sholder I used small size smudge and smudged over the gasp. For another one I used clone paintbrush.

Look at the bigger elf, you will see that her feets seems to fly not stay on ground. Pick the Burn tool, my settings are shape 20, level 30, soft edge 100. Make sure none of the objects are selected and paint over her right feet, to make feeling that feet is sinking in the leaves, do a little bit also around her left feet. Do the same on stone under the little elf, just change shape for 40. Now add perspective shadow to both objects. I am doing it with Eye Candy 3000 see the settings below. At this point you can merge all.

Back to feet, with clone paintbrush pick a bit of leves and paint on her feets. Now we have the image shown below.

Now lets make magic! First I applied Xero Bad Dream with Softness 103, Strengt 64 and coloration red. Then Creative Lightening Light Bulbe - I positioned it over the lathern light with settings Range 100, Strenght 235, Softness 66, Star spikes and star size 0, Ambient light 79. After that I applied Lights, go to Illumination/Lights and then click on Options, see the settings bellow. As a last step - Xero Mistifier, with settings Haziness 158 and Strenght 164. That's all.