The best way I've found to achieve this with all CSS and HTML (no images, etc.) is by using CSS3 gradients, per Lea Verou. From her solution:
div.round { background: -moz-radial-gradient(0 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -moz-radial-gradient(100% 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -moz-radial-gradient(100% 0, circle, rgba(204,0,0,0) 14px, #c00 15px), -moz-radial-gradient(0 0, circle, rgba(204,0,0,0) 14px, #c00 15px); background: -o-radial-gradient(0 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -o-radial-gradient(100% 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -o-radial-gradient(100% 0, circle, rgba(204,0,0,0) 14px, #c00 15px), -o-radial-gradient(0 0, circle, rgba(204,0,0,0) 14px, #c00 15px); background: -webkit-radial-gradient(0 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -webkit-radial-gradient(100% 100%, circle, rgba(204,0,0,0) 14px, #c00 15px), -webkit-radial-gradient(100% 0, circle, rgba(204,0,0,0) 14px, #c00 15px), -webkit-radial-gradient(0 0, circle, rgba(204,0,0,0) 14px, #c00 15px); background-position: bottom left, bottom right, top right, top left; -moz-background-size: 50% 50%; -webkit-background-size: 50% 50%; background-size: 50% 50%; background-repeat: no-repeat;}The net result is a set of transparent gradients with curves. See the full JSFiddle for a demo and to play around with the way it looks.
Obviously this depends on support for rgba and gradient, and accordingly should be treated as a progressive enhancement, or if it's essential to the design, you should supply an image-based fallback for older browsers (especially IE, which doesn't support gradient even up through IE9).
