To my surprise, the Image component has no radius property. I tried emulating the rounded corners by putting the image in a rounded Rectangle
Image
radius
Rectangle
QML currently supports only rectangular clipping, but you might want to take a look at DeclarativeMaskedImage in qt-components project:
http://qt.gitorious.org/qt-components/qt-components/blobs/master/src/symbian/sdeclarativemaskedimage.h