A Better Fake Tilt-Shift with the Gimp

Starting with the source image, I added a bunch of horizontal guides at all the ground point of all spots that have vertical objects. This is because the image distance is vertical. If this was done with a horizontal DOF you would rotate everything 90 degrees:

Guidelines

Create a new layer, and fill it with a white-black gradient:

The Gradient

Now create a new transparent layer above that. Using the guides and the image, sample the gradient layer with the eyedropper tool to get the colour at the ground of each vertical object. Using the polygon tool, select the area that would be at that depth (i.e. the flat surface of a building) and fill it with the sampled colour. Also make sure you fill the entire area you want in focus with a solid colour. This shows the solid blocks representing the different depths in the image:

The Solid Blocks

Here I have turned on the gradient layer's visibility to show how the bottom of each solid (parallel to the focal plane) block matches up with the gradient at its base:

Combined

Now copy visible and paste as a new layer (or just merge them together) then use an upwards motion blur (in this case). The motion blur should in the same direction as the gradient, light to dark. This will blend the gradient with the blocks to make the transition less dramatic, but preserve vertical lines like the edges of the buildings.

Blended with Motion Blur

Run the focal blur plugin. Remember to set the "focus" slider to match the area from the depth field you want in focus. Here I used a focal blur of 30. Now boost the saturation and play with the levels to make it look more toy like, if desired. Once again, the final result:

Final

This technique can also be used for scenes that fade horizontally into the distance. Here I started with a train image from Wiki Commons. Here is the depth field I used:

Depth Field

and the result:

Horizontal Depth of Field