The buttons can be made in photoshop. one of these tutorial may help: http://tinyurl.com/37jhkby
The fade effect can be achieved with something like this
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8" />
<title>Fade button</title>
<script type="text/javascript" src="http://ajax.googleapis.com/ajax/libs/jquery/1.4.2/jquery.min.js"></script>
<script type="text/javascript">
jQuery(document).ready(function($) {
$('#button').hover(function(){
$(this).stop().fadeTo(500, 0.6);
}, function () {
$(this).stop().fadeTo(500, 1);
});
});
</script>
</head>
<body>
<img src="button.jpg" id="button" alt="glossy button" width="95" height="90" />
</body>
</html>
You can see a demo here (http://azoomer.com/fadebutton/)