Back in the days of film, some labs would print photographs and round off the corners of the frames. This effect can also be used for any other shape.
- Duplicate the background (image) layer.
- Select the background layer and fill (Edit > Fill...) with white (or black or whatever color you want to appear as the frame for the image).
- Select the Shape tool on the Toolbar. Right click on it to select different shapes. For example’s sake, select the rounded corner rectangle tool. Set the Radius to 30px.
- Draw your frame over the image. Move it with the Move tool.
- Drag the duplicated image layer over the shape layer in the Layers palette. Alt+click on the image layer to create a clipping mask and apply the frame.