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When adding rounded corners to a background that has an image I'm getting a blurry rendering of the background image. You can see this with photos. Upon removing PIE from the CSS the background renders properly.
I'm encountering the same thing and it also affects the <img> tag in my case.
Example here: http://jsfiddle.net/q9UEr/
I think I am getting the same issue. when I add rounded corners to a div, the background image shrings by 30 pixels.
Yes, something weird is happening with background-image and rounded-corners. See also: #232
This appears to be fixed in 2.0beta, due to the refactoring of path calculations. Closing; reopen if you find this is still an issue.