Fade dots option

I am trying to use the fade dots option. when I select the dots and then go to fade dots on the tool bar whether I click start or end it does not do anything. Also, I am getting some distortion of the picture. I am really needing to get this figured out for a work presentation. I need to be able to take say a goatee from one picture and put it on another face. Can you help? Thanks. Also when I change the color of a group of dots it is changing every dot in the picture....?