When overflow is not set to visible, the background image of a child element should be clipped by the border-radius of a parent element. Currently it just overflows as if there was no clipping.
This is fixed now. Try a webkit nightly build.
It's not fixed as of r43841 running on Leopard. In the test case I am just about to attach, the five rounded rects should look the same due to the "overflow: hidden" on the bordered div.
Created attachment 30469 [details]
*** This bug has been marked as a duplicate of bug 50072 ***