The latest buzz is web 2.0, and the web design is usually with lots of rounded corners. To achieve this effect is pretty simple. Open your image in Photoshop and let’s get started.

1. Create a new layer
2. Pick the rounded rectangle shape
3. Choose the “paths” and Set the radius to 7px

4. Draw a rectangle, but don’t worry about getting it all the way into the corners
5. Now, hit Ctrl+T and pull the shape into the corners
6. Make the path a selection
7. hit Ctrl+Shft+I to get the inverse
8. Select your (unlocked) background layer and delete the corners!

Hope that helps save you some time and gets you the web 2.0 rounded corners effect.