I like the rounded corners, back I think they could be improved. Specifically, the final item in a menu, or the first and last items in a contextual menu don't quite look right to me. When highlighted, you get a 5px white space where the corner goes. I think it would be better to fill this space in with the highlight colour? I have included a quick mock-up so you can visualise. I imagine there is a sound engineering reason for why this isn't done, but for me it is far more aesthetically pleasing.