Windows7
Power User
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There are a numbr of ways to do it, this is only one: Select it with the eliptical marque tool, hold shift for a circle. Copy/paste to a new layer and apply a black inner shadow layer style to it. I also added a little shine on the right side with a brush.
If you want it black, invert the image first. Then you'd need to use white for the shadow color and screen for it's mode.
Hey man.. but which brush did you use to make that nice white shine stripe on the right side of the badge?
I want to have that one too.. i mean this one:
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