Here\'s my source image:

And my source image zoomed in:
        
This is actually done with two CSS3 box-shadows.
CSS:
#fuzz
{
    height: 100px;
    width: 100px;
    border-radius: 5px;
    border: 1px solid #333;
    box-shadow: 0px 0px 5px #333, inset 0px 0px 2px #333;
}
You can see it in action when i get back to real computer to edit the fiddle :-) (using my tablet now)
Obviously change the colors to your taste :)