In the latest edition of Digital Arts, Sam Hampton-Smith shows how to recreate the trendy tilt-shift lens effect in After Effects. Eventually this link will work, but for now you'll have to look at a hard copy: Fake the tilt-and-shift look using After Effects.
I'm sure a free AE tutorial will show up soon, but for now the outline re-described in the earlier post (and comments) Tilt-shift photography meme should do fine, if you have a soft touch on your gradient for the Lens Blur, Compound Blur or such filters. 2D Depth of Field, a 2006 video from VideoCoPilot, comes close but is missing something since it had other goals. According to a thread on the AE-List, further understanding can be gained by learning about view cameras, and by extension the Scheimpflug principle for changing the “plane of sharp focus.”
Update: Topher Welsh has a tutorial for AE, though it's not the first one:
Update 2: Maltaannon, Vailancio Rodrigues, and AE Tuts added Tilt-Shift tutorials for After Effects; this link connects the rest of the other info on this effect.