Awesome glass effect and image refraction

How in the world, can someone do this, then put it into flash…
http://24.28.193.70/flash/

check out those images on top. I assume they used photoshop? But since the button move from off to over when the mouse is on it, it makes me think it had to be in flash. So my question would be… how do youi make that kind of button in flash, or in photo, with the image distortion / refraction underneath? Any tutes or examples would be great. IO already have a couple of glass tutes from phong that are good, but is thgere anything in flash?