1. Get your button image or background ready, have it open and make sure it is a square (crop if you need to). I used a photo.
Copy it into your clipboard (Control-C)

2. Open a new canvas (72 dpi, about 400 x400 px) and select the selection tool, the mode is on Selection and will show as a little box in the sidebar (see picture).
Chose the circle as the selection type from the drop down menu and set the feather to 0.

3. Draw your selection circle (around 170 px in diameter, should take up about a quater of the canvas). If you have to try a few times to get it right, that is fine!

4. After you have drawn the selection circle got to Edit --> Paste into selection to drop in your background or picture into the shape.
(You can also just use a plain color and flood fill the selection with that.)

Yay, there we are, in good shape :)

Deselect Control.-D and let's move on...

5. Got to Effects --> 3D Effects --> Inner Bevel and apply these settings:


 

6. And because it was so easy we do the same thing again and just change the Angle to 215:


 

7. Not bad so far, but lets be more realistic.
Go to Effects --> Illumination --> Sunburst and place the light in the are where the light is coming from using these settings:


 

8. I added another sunburst thingy to make the button look more 3D:
(skip this step if you already like your button)


 

9. Now let's add some more reality by adding a shadow.
Go to Effects --> 3D Effects --> Drop Shadow and use these settings:


 

10. I repeated this step for a more dramatic effect...just what we needed, more drama...lol.

11. And there you  have it.
Save as a .png file and let people push your buttons!

Hugs!

Dani!