If you search and image of a fade haircut you'll see what it looks like and it might be easier to understand what the barber meant. Like Juan said the hair is longer on top and shorter at the bottom and back. A 'fade' is when all those layers change into each other smoothly otherwise you would see a line with longer hair on one side and shorter hair on the other side. "Blending the sides up" means that there won't be any lines between the different hair lengths.

That haircut normally leaces long hair in the top, and very short in the sides and even in the back of the head. Blend in this case mean like mixing the lenght of the hair depending the part of the head. A bit hard to explain, but for further understanding check an image of clipper haircut. Regards