1) Create a new file and then create a new layer. We need to use a
guideline, so we can make the circle right in the center of the canvaz.
First, show the ruler by go to View > Show rulers (ctrl+R),
then drag the guideline from the top/bottom and place it at the halfway
point. Do this same with a guidline from the left/right side. So by now,
you should have a cross line.(fig1)
Fig1
2) Now create a circle by using circular marquee tool (
). Place the
crosshair (mouse) at the EXACT point the guidelines cross. By holding
SHITF+ALT, click and drag out a circle (fig2), then fill it with BLUE (**again??
yupe....again 
**) (fig3)
3) Create a smaller circle than the first one (fig 4) then hit DELETE key (fig5) and deselect (ctrl+d)
Fig
2
Fig 3
Fig 4
Fig 5
4) Ctrl click that layer to select the circle, then go to channel
window (
) and create a new channel by click new channel icon (
). Fill
the selection (ALT+BACKSPACE) with WHITE then deselect
(ctrl+d)....(fig 6).
Now go to
Filter > Blur > Gaussian blur and use 4px, then again 3px,
and then once more 2px..(fig7)
Fig
6
Fig 7
5) Now load the selection of that ring click 
in
that channel window.
6) Go back to layer window, then go to Filter
> render > lighting effects, set similiar like mine or you can
experiment with it.....(fig8). Make sure
you select the 'texture channel' menu correctly tho....and don't
forget to click OK *duh* =)
Fig
8
7) There are 2 ways to smooth the circle :
- Once you were done with step #6, ctrl+click that layer, then go to
Select > Modify > contract and use 1px.
Shift+ctrl+I to inverse the selection and hit DELETE to remove
the un-smooth part.
- Once you got step #3 (fig5), smooth
the RING first by using this smooth
circle tutorial
Here is that I came up with :
Hope it helps.
