There are multiple ways of creating those smooth corners. You can
do this with the marquee tool or pen tool. But I will explain
the best option now which gives you perfect smooth corners.
Open a new document. Set the height and width both to 500 pixels.
Next use the paint bucket to fill the background black. Create a new
layer. Now you can start creating your desired shape.
Now we have to transfer the image to a channel.
To do this select the whole image with the shortcut CTRL+A. Next
we need to cut this selection, go to Edit -> Cut (or CTRL+X).
Now find the channels tab (in the same group as Layers and Paths),
create a new channel and paste your shape (CTRL-V). Deselect your selection
by pressing CTRL+D.
Now we want to smoothen up things. We use a filter
for that called gaussian blur. You can find this filter in the menu
item Filters -> Blur -> Gausian Blur. When this filter pops up use
a Radius of 10.0 pixels.
Next we have to set levels. Press CTRL-L to popup the Levels.
Use the following Input Levels: 110, 1.00, 120.
Almost done! Press W (or go to toolbox and select
the magic wand tool) and select your shape. Copy it (CTRL+C) and select
the layers tab. Paste the selection (CTRL+V). You made it! You now
created a beautiful rounded corner.
