What Rich is saying that he uses a plugin which can be used in PhotoShop or Illustrator and it is very expensive.
If you want to achieve the effect that you described I am afriad it is the long process however why not copy it, scale it down,change the colour and then blend it. you may have to go into the shape editor and change certain parts and it might not give you the correct effect that you want but it will be close to it.
The other way could be to make your shape smaller and then put a Rounded2 Bevel on it.
Design is thinking made visual.
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