We are going to make a cutout basic button. First, use the web background designer to make a texture that does not have obvious repeats, like the background to this page, so that the final button will blend in wherever it is placed. Open a new page, size 640 x 480 pixels, and apply your texture to it. Open another page, 320 x 240 pixels, and fill it with black. Make sure that both are set at 1x magnification, and scroll your textured page to the top left corner, so that your starting position looks like this.

Select the standard selection tool, and set the selection settings at Mode/New, Shape/Ellipse, check the fixed size box and set the size at 200 wide, 90 high, soft edge 0.

Click in the centre of the black page, and an ellipse will be selected. Copy it to the clipboard, select your textured page and paste it in the centre.

Select Edit/Object/Add Shadow and set the parameters as shown in the picture on the right.
Your image will now look like this. Select Edit/Selection/Merge All.The selection marquee will vanish and you will no longer be able to move the ellipse.