My preference with round tails is to go with a smooth, elliptical rail line. This maximizes the effect of the round tail and accentuates the smoothness flow when going rail to rail or pulling through turns. Hips, bumps, wings... all bump down the tail width and create varying degrees of "pivot," which has the opposite effect of a smooth rail line... it creates a sharper transition from rail to rail, and helps put a sort of "corner" on your turns. To understand how these "pivot points" are created by breaks in the rail line, understand that they are really "release points"... places where water that's flowing along the bottom and along the rail, providing lift and hold, suddenly are released by the form of the board... kinda like knocking a chair leg out from under you... you want to fall to that side. Except because you're moving, that "release" of force is perpetually there, and you can play with it. It becomes a point of released pressure around which you can integrate other elements of design... like fin placement.
So... elliptical outlines and round tails complement each other, just like wings, etc., and tails with corners, IMHO. This includes swallows, bat tails, and other "cut-out" tail shapes, as well as squares and squashes. Everything else is a hybrid or just a fashion statement... like those round tails or diamond tails with low wings that Biolos seems to do a lot of. But there's nothing wrong with that, either!