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Johannes' comment was correct. You simply need a mask to hide the text outside the rounded rectangle. I'm merely using your posted gif as a base. The actual Photoshop document will most likely be set up differently, but this is the basic item you need. Highlight all but the bottom layer in the Layers Panel and group those layers (Layer > Group Layers). ...


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You're experiencing dithering due to the color reduction of the GIF color table. Gif images can only contain a maximum of 256 colors. There's really not a great deal you can do about it. You are asking the gif format to support smooth color, which it doesn't. The best you can do is experiment with the dithering options in the Save for Web window. However, ...



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