Create a new document, 25 pixels high is good. Make it as long as you think you'll need -- you can trim it down later.
Step 2
Make a new layer and fill with white. Then in the blending options set a gradient overlay light blue>white and a 1 pixel black inside stroke.
Step 3
Now add your text. Make sure there's plenty of space between each option. When you're done, trim up the border length-wise to fit the text and center the text vertically. I generally use Arial without any smoothing for the most professional look.
Step 4
Duplicate the background layer and edit the blending options. This time change the color of the gradient overlay but leave everything else the same. I chose a light yellow/orange color. This is the mouseover layer.
Step 5
Take out the slice tool and draw a box around EVERY OTHER menu item. This will slice out each menu item to a separate image later.
