This tutorial will teach you how to make your images have rounded edges like this.
Open any image you want to use.
Using the Rectangular Marquee Tool make a selection leaving a few pixels of space on the sides like this.
Now go to Select >> Inverse. Then go to Select >> Modify >> Smooth. On the pop up put 6 pixels in the box that says Sample Radius. Then press DELETE.
Now go to the Layers Palette and right click on the layer,and duplicate the layer, and drag the layer with the little lock on it down to the trash bin at the the bottom of the layers palette.
With the image still selected, click on DELETE and the selected portion will be deleted like this, you should see it checkered that means its transparent.
CTRL+D to deselect.
Then go to Edit >> Stroke and on the pop up put 1 pixel, make this is going to be the border on the rounded edge, click OK.
Now go to File >> Save For Web, on the large pop up, make sure your settings are like mine below, you want to save as gif or it wont be transparent.
make a selection leaving a few pixels of space on the sides like this.
