How to make rounded tabs with css?

Here's a proof of concept example with pure CSS. It uses pseudo-elements and rotate. It's pretty close to your source image and could get closer with some work.

screenshot

Demo: http://jsfiddle.net/csDP9/9/

HTML:

/* Reset ul styles */
body { font-family: sans-serif; }
ul {
    list-style: none;
    margin: 0;
    padding: 0;
}

ul {
    padding-left: 20px;
    z-index: 5;
}
ul li {
    color: grey;
    background: #fefefe;
    padding: 14px 24px 10px;
    margin: 0px -6px 0 10px;
    position: relative;
    float: left;
    text-align: center;
    z-index: 1;
}
ul li::before {
    content: '';
    display: block;
    position: absolute;
    top: 0; left: 0;
    width: 70%;
    height: 100%;
    border-style: solid;
    border-color: #eee;
    border-width: 2px 0 2px 2px;
    border-radius: 8px 0 0 0;
    -webkit-transform: skewX(-20deg);
       -moz-transform: skewX(-20deg);
         -o-transform: skewX(-20deg);
            transform: skewX(-20deg);
    background-color: inherit;
    z-index: -1;
}
ul li::after {
    content: '';
    display: block;
    position: absolute;
    top: 0; right: 0;
    width: 70%;
    height: 100%;
    border-style: solid;
    border-color: #eee;
    border-width: 2px 2px 2px 0;
    border-radius: 0 8px 0 0;
    -webkit-transform: skewX(20deg);
       -moz-transform: skewX(20deg);
         -o-transform: skewX(20deg);
            transform: skewX(20deg);
    background-color: inherit;
    z-index: -1;
}
ul li.active {
    color: orange;
    z-index: 10;
}
ul li.active::before,
ul li.active::after {
    background-color: #fff;
    border-bottom-color: #fff;
}
ul li:not([class='active']):hover::before,
ul li:not([class='active']):hover::after {
    background-color: #efefef; 
}
<ul>
    <li>Sample 1</li>
    <li class="active">Sample 2</li>
    <li>Sample 3</li>
    <li>Sample 4</li>
</ul>


You could do this with CSS Matrix Transforms, but, frankly, I wouldn't bother. It's complicated and the cross-browser compatibility is spotty. Just use images.