Take a look at Bert Monroy's Time Square piece to see the plastic shirt button he used in a billboard of Cindy Crawford. He starts with a blank document, then uses the ellipse tool to create a cream colored round button shape. He duplicates the shape, moves it a little to the left, then bridges the gap between the shapes. Dodging and burning allows for some toning on the under layer.
On the top layer, Bert selects roughly half of the circle and then adds a gaussian blur to the edge where the shape meets the toning.
In a new layer, create two smaller circle shapes filled with the same creme color. Join the two shapes to make a pill shape. With a bevel, this will serve as the depressed area inside the button. Blurring the entire layer will add softness. Dodge and burn the upper base layer of the button as necessary.