IE5.5 and IE 6 are not support PNG alpha transparency. When we put a PNG transparency backgroud image, and open with IE5.5 or 6, the image will display with an ugly grey color surrounding as following

<!--NormalPNG.html-->
 
<html>
<body>
<img src="unknown.png"/>
</body>
</html>

There are two common methods to make IE5.5 / 6 PNG alpha transparency support.
1) Microsoft.AlphaImageLoader
2) Twinhelix – iepngfix.htc

P.S IE7 and other browsers like opera and firefox have no trouble with PNGs alpha transparency support.

Microsoft.AlphaImageLoader

Use “filter:progid:DXImageTransform.Microsoft.AlphaImageLoader” method to load the PNG image.

<!--PNG-AlphaLoader.html-->
 
<html>
<body>
 
<span style="width:128px;height:128px;display:inline-block;
filter:progid:DXImageTransform.Microsoft.AlphaImageLoader(src='unknown.png')">
 
     <img src="unknown.png" width="128" height="128""
style="filter:progid:DXImageTransform.Microsoft.Alpha(opacity=0)"/>
 
</span>
 
</body>
</html>

Twinhelix – iepngfix.htc

Visit http://www.twinhelix.com/css/iepngfix/ and download the iepngfix.zip file. Extract it and get the iepngfix.htc and blank.gif files.

<!--PNG-IEPngFix.html-->
<html>
<body>
 
<img src="unknown.png" width="128" height="128" style="behavior:url(iepngfix.htc)"/>
 
</body>
</html>

P.S Both solution will prompt Active X security dialog if we open it locally. Please click allow blocked content to see the effect. However it will not prompt Active X security waring if page is hosted in webserver.

Download source code here –> PNG alpha transparency Testing

Reference

1) Microsoft.AlphaImageLoader – http://msdn.microsoft.com/en-us/library/ms532969.aspx
2) Twinhelix – iepngfix.htc – http://www.twinhelix.com/css/iepngfix/