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Open a new window, approx. the size you want your image to be.
Add symmetrical borders in a different color. (Image | Add Borders)

Add a Gaussian Blur of about 8.00. (Image | Blur | Gaussian Blur)

The more blur you add, the more round your edges will be in the finished product.

To remove the blur and sharpen the edge adjust the brightness/contrast settings.
(Colors | Adjust | Brightness/Contrast)
Set the Brightness to 0 and the Contrast to 94 . Adjust the contrast higher for a sharper edge, lower for a softer edge.

With your magic wand, select the "button" area. Add a cutout, (Images | Effects | Cutout) with settings of:

• Color: Black
• Opacity:68
• Blur: 13.8
• Vertical: 0
• Horizontal: 0

Add a dropshadow, (Images | Effects | Dropshadow) with the following settings:

• Color : Black
• Opacity: 65
• Blur: 12
• Vertical: 3
• Horizontal: 3

Put the finishing touch of a slight shine on with the eraser tool. If the background color on the color palette isn't white, change it to white. On the eraser tool control palette, select a round shape, size 7, Opacity 25, Hardness 0, Density 100, and Step 1. A few clicks in the same spot on the button will result in the highlight.