Here's one way to do this:

(1) Make a copy of the picture and stack the copy right on top of the
original.
(2) Use the crop tool to crop the copy of the picture to just what you
want to highlight. The crop tool only does rectangles. If you need ovals,
you will have to insert the picture into an oval, and this will be harder
to size and line up, but it is doable.
(3) Now you can do one of several things. The easiest is probably to set
up an emphasis animation on the orginal (uncropped picture). The
transparency effect seems OK. Alternatively, just Insert>Duplicate Slide
and then use the picture tools (contrast and brightness) to fade the
uncropped picture.

--David