Create the graphics
First off, create three version of each graphic button, one for each "state" that the button can have:
off - used when the button is not selected.
rdy - used when the mouse pointer is over the button and it is ready to be selected.
on - used when the button is the currently selected option.
Each of these three versions is used at different times depending on what is happening on the screen. For this example I have created nine different graphic (three states for three different options) and used different drop shadows and tabs for the different states. You could use whatever graphics you wanted, just make sure each state looks different.
Set up the Frames
Now set up two frames: one for the menu and one to hold the content.