Google has the coolest effects - once it was a Pac-man game, today is apparently the 160th anniversary of the first World Fair, and Google\'s logo has an image of i
There is a full example of magnifying any sort of HTML, including HTML5 at http://www.aplweb.co.uk/blog/js/magnifying-glass/. Works cross-browser too - although rounded corners are a bit iffy on most browsers - so you are going to have to use a box rather than circle.
Here is how to works:
That is pretty much it too it. There are lots of little things to look out for though to make it work on all browsers.