On modern browsers (Firefox, Opera etc), the [PNG images] halo problem is solved – but not in Windows Internet Explorer prior to version 7. IE 6 and under render the image with an ugly background which looks even worse than the GIF halo.
Here is the solutions, by Bob Osola, a small javascript that fixes the halo problem.
Note: It doesn’t work when used with background images.
Update: A solutions that works on backgrounds can be found at PNG Behavior (WebFX)


