by Don Herion

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5) Now comes the cool part. Bring up your 'Gaussian filter' tool - Filter - Blur - Gaussian Blur. Play with various settings to soften the channel. I used 2.5. Try not to go much higher than 3.0 or you might over blur the channel.

Use 'Gaussian blur' to fake round corners.

6) To round the corners go - Image - Adjust - Levels. Drag the two end sliders toward the middle one. This is not an exact science. If you bring them too close you will get the jaggies. Here are my choices.

Adjust 'output levels' to round corners

7) Now you must transfer your design to the new layer. 'Crtl - A' and 'Ctrl - C' to select and copy the 'alpha channel.' Select the new layer and 'Ctrl - V' pasting your design in the layer. Here is the final result.

Final result.