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Open the layer palette, and first right click on your layer 1, use rename, and call it silk. Click the button top left to add a new layer, OK the properties box, and rename this one wood. It needs to be the highlighted, selected layer, so click on it if it is not. (Your highlight may not be the same colour as mine, because I customize my Windows 98 colours, and maybe you do too.)

Choose the selection tool, shown highlighted in the toolbar here. In the Tool Options Palette, set the selection type to rectangle, feather 0, anti-alias not checked.

Now double click on the selection tool in the toolbar, and you will get this box. Set the settings as shown here.

Now use Selections>invert so that the edge area of the image is selected. Fill this edge with any solid colour you like - it does not matter what it is because we are about to hide it, but there has to be a colour there. Keep the edge area selected.

Use Effects>Texture Effects>Sculpture. Choose the mahogany preset and set these settings. The name of the preset will change to custom as soon as you start changing the default setting. OK that, and still keep the area selected.

Use Effects>3d effects>Inner bevel and set these settings. OK this, and now you can release the selection by using Selections>Select none and your image will look like the one below.

Now we will move on to add the glass