I bugged myself a little to create an image in GIMP which will have rounded corners. I tried with selection tools and everything else I could think of to no avail. Then I browsed trough the Filters selections and I found the script Round Corners. The image I created was initially like this (you can also import a picture):

Looks kinda dull and boring, so now we will make it with round edges and make it more interesting 🙂

Click on the Filters -> Decor -> Round Corners… and a new window with settings will be shown.

NOTE: if the filter Round Corners is grayed-out and you cannot select it, it means that the image has Alpha channel, so you need to remove that. Go to Layer -> Transparency -> Remove Alpha Channel

The window with the settings should look like this

The default settings might not work for everybody, so you can test it how it transforms and what you need.

The options are pretty much self explanatory, so for example if you do not want any shadows just set the Shadow X/Y offset to 0, Work on copy will create a new file and will not modify the original, Add Background will put the new image on a background etc.

The default settings will generate an image like this

You can see the rounded edges, the shadow, the blur on the shadow and the background (white). Now the image looks much slicker and more modern.

Let me know if you have questions about this in the comments below.