This could be done quite easily using a few tools in most image editors.

Take an image of a magnifying glass - use the select or mask tools to remove the background and the centre of the glass.

Place it on one layer and the section you wish to magnify on the layer below.

Then select the area you wish to magnify - add 'bloat' or 'sphereize' (both are Photoshop filters, but any similar warp tool will give the desired effect). Then position the magnifying glass over that area. Add some highlights to the glass and a little drop shadow and you're done.

[edited by: limbo at 3:01 pm (utc) on April 30, 2007]