http://superuser.com/questions/640954/inkscape-rounding-corners-of-shapes

Select the rectangle or square

Select the nodes option

On the right hand corner, you will see a round node instead of a square node. Drag down the node until you get the rounded corner you want.

The nodes option:

Round widget you need to drag to get rounded corners:

What happens when you drag the round widget:

As others have noted this only works on rectangles (but that is a common use case that will land people on this page).