I normally don't give my add-ons a plug like this in the forum, but I've had a lot of requests and questions on my Round Corners on Anything add-on to support images (not just DIVs with image backgrounds). This has now been added and available in the C5 marketplace:
http://www.concrete5.org/marketplace/addons/round-corners-on-anythi...

It uses CSS rounding on browsers that support it, and HTC (instead of Javascript) in Internet Explorer 6-8, so it loads super-fast and won't break when jQuery updates to a new version.

If you've already purchased it before, you can just download the latest update from:http://www.concrete5.org/profile/orders/...

Enjoy!