Does it keep the background transparent?

Yes. Only the corners are removed, and the rest of the image is untouched.

How large should the radius be?

For a card-style look, try 5 to 10 percent of the image width. For a pill shape, use half the height.

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Corner radius (px)

Does it keep the background transparent?: Yes. Only the corners are removed, and the rest of the image is untouched.
How large should the radius be?: For a card-style look, try 5 to 10 percent of the image width. For a pill shape, use half the height.