First, create your image.
Then, upload it to the web via Picasa, Photobucket, Flikr or onto a page on your blog.
Now, go into the layout/design of your blog and choose to "add a gadget"... chose and add HTML/Java to your blog... copy and paste the following code into the content box:
<a href="WEBSITE TO LINK TO"
target="_blank" title="Mouseover Words">
<img src="WEBSITE OF GRAPHIC"
alt="ALTERNATE NAME" /></a>
Now it's time to copy the link you'd like your button to bring you to when clicked on. Paste it in place of WEBSTIE TO LINK TO and yes, keep the quotation marks there.
Head back to the picture you've created and posted on a website. You can either find and copy the URL off the program you're using or you can sometimes right click the image, it will open onto it's own webpage and you can copy the URL/Web Address from there. Paste that in place of WEBSITE OF GRAPHIC and, once again, keep the quotes.
In the place of ALTERNATE NAME, type another name for your button. This is what will be displayed if your graphic can not be found.
In case you're wondering...
Mouseover Words are the words that will appear when you mouse over the chiclet (not required but it is supposed to help with SEO)