This was mentioned in an older post but the link was broken, and I couldn't reply, so here ya go.

A good a quick solution to allow IE 5-6 to render transparent PNG's in your store can be found here.

If you throw the main PHP file in your main catalog directory, the first tag at the top of your tpl_header.php file, and the second tag at the bottom of your tpl_footer.php file, then you should be set!

(also make sure that you specifiy height and width values for any png's that you use)