You could try creating the rounded corners with CSS3 and then use CSS3 pie with internet explorer to get the rounded corners fixed.
EDIT:
Just read this on the malsup website you mentioned.
Recently I added support for native
border-radius rounding in browsers
that support it (Opera 10.5+, Firefox,
Safari, and Chrome). So in those
browsers the plugin simply sets a css
property on the element. But in IE,
we'll have to wait for version 9
before that is supported. And for all
browsers, choosing a pattern other
than "round" requires the use of the
"div stips" method.
For other readers, can this be an indication that this jQuery plug-in is based on the new css3 and html5 techniques?