PNG in Windows IE: The SolutionHome | The Problem | The Solution | How To Use | More Info
Compare the above GIF to the same image below saved as a PNG. The transparency should now be working in IE. Try dragging the car image around the screen and notice how it is "see-through".
Finally, here is the same PNG right-aligned to this paragraph using the very common (deprecated) img align="right" construct. The PNG can be positioned in the same way as JPGs or GIFs, and the transparency issue is now fixed.