How to create Felt Shapes in PSE

1. Choose flat shape & colour with foreground colour (background colour should be slightly lighter tone)

2. Filters ---> Artistic ---> Filmgrain
Grain: 20.

3. Filters ---> Render --->Fibers
Variance: 6.0
Strength: 1.0
Randomise until happy with results

4. Filters ---> Texture ---> Texturiser
Texture: sandstone
Scaling: 52%
Relief: 2
Light: top left

5. Layer Style Settings
Lighting Angle: 135
Drop Shadow: size 8, distance 8, opacity 75
Bevel: size 9, direction up

See also the following tutorial:
{tutorial here}