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The image

I am speaking about the drop-in effect around the round edges. I like the fact that the actual theme seems to be a bit further back and the border is closer to the viewer.

I can gather that a portion of this must be using an inner shadow with black color. Is this correct? How can I search this? I have spent quite a while now, but my non-existant background in design doesn't help.

I have access to photoshop but could use other tools if needed

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You have my vote in favor of your teacher. – celiapgt Feb 12 '12 at 2:35
up vote 21 down vote accepted

It's pretty much simply a Bevel & Emboss layer style set to Emboss. An inner shadow helps a little bit. But depending upon your needs, the inner shadow may not be required.

dropin Gradient Overlay Inner Shadow Bevel and Emboss

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Ohhh thanks a lot, I wish I could give more votes! – Mihalis Bagos Feb 1 '12 at 15:06

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