1. Open a workplace ( Files > New..) I used 500x400

2. User the "rounded Rectangle Tool" on the tool box.

 

3. Select the effect in the illustration below:


 

3.1 Make sure the "Radius" is set to "7px".  Make a typical button using the style selected.




4. Select the "shape" layer

 

5. Goto  Layer > Layer Style > Blending Options..



6. Follow each steps in the illustration below:








Continue with the tutorial...