Images with glow effects like lighting and fire are not easily masked out.
If the photo has a dark or pure black background, you can change the Layer's Blending Mode to Screen to make the black transparent.
Add Adjustment Layers (Levels, Curves, and/or Hue and Saturation) to change the brightness or color of the graphic. Remember to right-click and create a clipping mask to tie the adjustment to the single layer.
To manipulate the shape go: Edit > Transform > Warp.
Choose a grid 3x3 or 4x4.
To add flames another way is to use Photoshop's build-in render effects.
Create a New Layer.
With the PEN tool, draw a path where you want the flames to appear.
Go Filter > Render > Flame.
Choose the type of flame and adjust the properties.
You can also Render other things like Trees and Lens Flares. (see example to the right)