The original PNG transparency test gives a lot more information on the problem
Older versions of some big-name programs (Internet Explorer (v6 and older), Adobe Photoshop (v7 and older)) cannot correctly open 32-bit (24-bit color, 8-bit alpha) PNG files with alpha channel transparency. The below image has a yellow background that should be transparent, but is visible in broken programs.
8-bit color with transparency

32-bit color with transparency

How it looks in broken programs

PNG Alpha Test image should look like this:

PNG Alpha Test image looks like this in your browser:

How it looks in broken programs

This PHP code will generate the above image:

$back  ImageColorAllocate($Image2552550);
$red   ImageColorAllocate($Image255,   00);
$green ImageColorAllocate($Image,   02550);
$black ImageColorAllocate($Image,   0,   00);



The majority of popular image-displaying software had been fixed to work correctly by mid-2004. This is the compatability list according to my latest information (email me if you have any updated compatability information)

8-bit works, 32-bit is broken:Both versions work correctly: