
File>New
Make sure the foreground color is black.
Edit>Fill
select:
Use: Foreground Color
Mode: Normal
Opacity: 100%
Layer>New>Layer
OK
Using the Rectangular Marquee Tool, select the whole entire bottom half of the layer.

Select the Gradient tool and match these options:
Mode: Normal
Opacity: 100%
Reverse: UNCHECKED
Dither: CHECKED
Transparency: CHECKED
Now, drag the gradient tool from the bottom to the top of the selected area.

CTRL+D to deselect.
Press R on the keyboard to turn on the smudge tool. Make sure it has this icon:

OPTIONS:
Mode: Normal
Pressure: 80%
Use all layers and Finger Painting are both UNCHECKED.
Now about the brush....
Choose a big brush, such as any of these:

You will now start dragging from the red up to the black in wavy patterns, but don't just drag from the red, drag from the orange, too. Every few strokes, change the shape and size of your brush. Also, don't just drag up; drag downwards once in a while to give it more 'flame'.

Your picture should look similar to what's above. Don't worry if it's not exact.
Press B on the keyboard to change from the Smudge tool to the Paint tool.
Match these settings:

Now, make the foreground color yellow, and draw a few lines on the flames, as shown in the picture.

Next, press R on the keyboard to get the smudge tool on again, and start smudging the yellow lines into the flames, so that no more graininess is visible from the Dissolve that we used on the painting part. Just make them look natural.

Now, press B on the keyboard again to get it back to the painting tool. This time, select these options:

Make sure that you have a dark red set as the foreground color.

Briskly draw a curvy line amongst the red part of the fire, as illistrated in the following picture:

Select these options with the Smude tool (hit R on the keyboard first.)
Now, start smearing the dark part of the fire around until it looks good. You can expiriment with the brush size/shape, pressure, and mode until you get it to look just perfect.

Well, lo and behold, you have just created Virtual Fire! You can always add text if you want.
P.S. You can also hit Ctrl+U to bring up the Hue/Saturation box. (make sure you have the layer with the fire selected when you do this.) You can change the color of the fire with Hue. If you make it blue, it looks icy! Try it out!
