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A quick alternative in PSE 5.0 is to use the Cookie Cutter Tool.
1) Open the paper/photo you want to round.
2) Select the Cookie Cutter Tool and choose the shape from the drop-down menu at the top. You'll have the same choices as with the Custom Shape Tool.
3) Make sure you have the layer of the paper/photo you want to round selected and draw the shape. Hold down the space bar to move the outline to exactly the correct position.
4) When you are satisfied with the positioning, click the check mark and your paper/photo will be cropped into the shape you wanted.
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