I was until recently yesterday, employing a modified version of niftycorners in the new joomla 1.5 install/administrator screens. However, with all the other stuff that's going on including other javascript libs loading, they performance was not the best, so I've gone back to images.
Rounded corners are a neat subject actually, and there are a number of ways to do them, even with images, the technique I used on joomla.org and that can be done by default in joomla with -3 in the loadModules() method uses 4 nested divs, that you have to assign images to each corner and with the appropriate padding and images you can get a nice effect. Another method is actually what nifty and some of the other js solutions do, is to have nested divs ontop and below your content, the top divs do the top left, top, and top right elements. The middle contains a couple of divs to handle left and right, and the bottom again has 3 divs for bottom left, bottom and bottom right. Anyway, 1.5 administrator uses this technique as it's more effective at scaling to larger boxes.
Well I didn't read all the posts here, but having just read szosmething about this yesterday, thought i would add my 2 cents really fast. I remember reading, while I was learning what the switches on the modules did..I read that the -3 switch is to assign a bunch of div's to the module in order to create rounded edges or something for the module. Not sure how you do it, but that's what I read, do with it what you will:)
yup william, three div's, one each for header, middle and bottom. I once read a great tutorial on this once, just can't remember where. It was at a rival template club i believe.