Ah ha!
The truth has been revealed .png will work in EI6 and even as far back as IE4 , but as soon as you apply an alpha transparency to the binary image, the image will pick up any back ground colors that you are using in your site.
So the first image is what the alpha transparency would look like in IE6 (notice you can still see the image)
The second is what it looks like with the alpha transparency fix.
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