In any of the recent versions, with the support of translucency on the vector layers, this is much more straightforward method and you don't need a raster to do it. Very similar to what Keith mentioned, you can draw any shape for display (ellipse in this example) and a larger rectangular boundary, erase the ellipse out of the larger boundary making visible your highlighted area. Then play with the translucency of the "ellipse" layer so that you can see as much of what is outside the area as you wish. Example is attached. You can do this with or without a layout.
Eric Blasenheim
Pitney Bowes Software