I sympathize with all arguments here. However, if the client expects a lot of the audience to be using IE, and is willing to pay for the extra effort, some conditionally commented CSS and JS could layer on the extra images for the corners that really need to be round without sacrificing any performance or SEO juice. You may also want to check out http://code.google.com/p/ie7-js/ .
If the client wants backwards compatibility, then it should be a billable extra. If you're billing on an hourly rate, it's in their best interest to get the project finished as fast as possible.
I don't think the document was anti-backwards compatibility, just well, you know clients... they are always wanting the look like a Porsche, while still driving a rusty old pick-up.
They are just trying to justify the lack of support in an easy to swallow way. You want support, expect to pay for it, but realize that the money you're paying will only benefit a small percentage of your audience (you included).
Everyone's had (and still get) those clients using IE5, saying that if it doesn't work for them, it won't work for the rest of the internet.
