1. Open Photoshop. Create a new file
with transparent background. Draw circle with Shift and Elliptical
Marquee tool. Fill it with color.

2. Make one layer copies of the original layer. Fill
it with different color. You will get the following layer structure.

3. File > Jump To >
Image Ready 3.0

4. Select the first frame. In the Animation Palette
click the small triangle at right top (marked with red circle).
5. Click Tween. The dialog box will appear. Select
the number of frames you want to add for animation. Check the Opacity
option ON. Click OK.

6. Check the performance in the browser
File > Preview In > Click the browser
you want

7. Save the file with
File > Save Optimized or File > Save
Optimized As
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