Here's a plain-JavaScript example:

var modal = document.getElementById('modal');
var shade = document.getElementById('shade');
document.getElementById('start').onclick = function() {
  modal.style.display = shade.style.display = 'block';
};
document.getElementById('close').onclick = function() {
  modal.style.display = shade.style.display = 'none';
};

// This code is a workaround for IE6's lack of support for the
// position: fixed style.
//
if (!('maxHeight' in document.body.style)) {
  function modalsize() {
    var top = document.documentElement.scrollTop;
    var winsize = document.documentElement.offsetHeight;
    var docsize = document.documentElement.scrollHeight;
    shade.style.height = Math.max(winsize, docsize) + 'px';
    modal.style.top = top + Math.floor(winsize / 3) + 'px';
  };
  modal.style.position = shade.style.position = 'absolute';
  window.onscroll = window.onresize = modalsize;
  modalsize();
}

body {
  margin: 0;
}

#shade,
#modal {
  display: none;
}

#shade {
  position: fixed;
  z-index: 100;
  top: 0;
  left: 0;
  width: 100%;
  height: 100%;
}

#modal {
  position: fixed;
  z-index: 101;
  top: 33%;
  left: 25%;
  width: 50%;
}

#shade {
  background: silver;
  opacity: 0.5;
  filter: alpha(opacity=50);
}

<div id="shade"></div>
<div id="modal">
  <textarea rows="5" cols="25"></textarea>
  <button id="close">Close</button>
</div>

<p>
  <button id="start">Start</button>
</p>

There are various improvements you can make from there, such as iframe hacks to fix IE z-indexing, or encapsulating it in a reusable object, but that's the basic way it's done.