Let's take a look at what's happening in the video:Note: This video is aimed at photoshop intermediates, if you have absolutely no idea what's going on, this one's not for you.
00:00 - 00:30; Creating a High-Res Canvas (in order to shrink later on, for best results.) Then using the Pentool and wrap, making the base top part for the island.
00:00 - 01:30; Using different brush sizes, creating a grassy-like outline to the shape, and merging it into one layer.
01:30 - 02:10; Placing a grass stock photo on the above shape, and using select-inverse, cutting the grass according to the shape.
02:10 - 02:40; Using levels (Ctrl+L) Enhancing the grass colours then duplicating the layer and darkening the one underneath to give it a "depth" look.
02:40 - 03:40; Using the same technique for the grass, making the ripped earth underneath the grass.
03:40 - 05:11; Drawing Some Shades on the earth, and trying some lightning options, basically, you should experiment with this part till you're happy