Make a new layer on top.
Add a new SPOT color for varnish -- it doesn't matter what it looks like as long as it's a spot color, and you should name if Varnish to avoid confusion.
Draw frames on the new layer where you want the varnish and fill them with the new spot color.
VERY IMPORTANT!!!!!!!!!!!!! These frames MUST be set to overprint or they will obliterate your photos. Window > Output > Attributes in CS5.5, but I think it may be directly under the Window menu in earlier verisons, and chck the Overprint Fill box. You may also want to define this as an Object Style that you can assign to the varnish frames. Both the color and the overprint attribute can be set in the Fill section of the style definition.
You'll probably want to turn off the varnish layer for proofing, but it needs to be there for separations. My instinct would be to export with Acrobat 6 or higher compatibility to maintain the layers.
wow sounds quite complicated, thank you tho.. Do the printers usually
do this for you or is it normal to do it yourself first, as I dont want to mess it up and anything go wrong?!
Ask your printer. They should do it but there may be extra charges. It's not an uncommon procedure and not too difficult to learn.
Sounds more complicated than it is. Good thing to know how to do, though (along with how to make die lines for die-cut projects, which is pretty much the same thing with stokes instead of fills), so you might want to make a copy of your file and give it a try.
Some printers like to do it themselves, some want you to do it first. Talk to them.