CSS Только решение для современных браузеров:
ul {
background-color:#ff00ff;
background-image: -moz-radial-gradient(50% 50%, ellipse closest-side, #ffffff 0%,#ff00ff 110%);
background-image: -webkit-radial-gradient(50% 50%, ellipse closest-side, #ffffff 0%,#ff00ff 110%);
background-image: -o-radial-gradient(50% 50%, ellipse closest-side, #ffffff 0%,#ff00ff 110%);
background-image: -ms-radial-gradient(50% 50%, ellipse closest-side, #ffffff 0%,#ff00ff 110%);
background-image: radial-gradient(50% 50%, ellipse closest-side, #ffffff 0%,#ff00ff 110%);
height:50px;
width:400px;
margin:0;
padding:0;
border-radius:25px;
overflow:hidden;
}
li {
width:100px;
height:50px;
float:left;
}
li:hover {
background-color:rgba(0,0,255,0.2);
}
Нажмите, чтобы увидеть демо-версию: http://jsfiddle.net/AlienWebguy/ZLg4B/