Using photoshop, double click your image and rename it "layer 0" This will allow you to add a vector mask. Now go to "layer" then "add vector mask" and ensure you "reveal all". Notice on the layer you will now have a second icon with your image. Now go to the toolbar and select the "rounded rectangle tool". Now open up the rectangle until its just on the edge of your image. Once you release the mouse you will notice that your image has rounded corners and your background is transparent. You now add another layer, place it below your masked layer and call it background. While on your background layer, go to the color picker and choose the color you want to match your web page background. Resize the image to whatever size you desire and save it for web. Remember, compress it till it hurts.
Viola, you have a rounded image.
If you want to make some really eye appealling effects, while your on your layer 0, double click it to open up the layer style dialog box and give it a stroke or drop shadow effect.