Kitu...........I think that the problem lies within the image itself. I downloaded the image and tried it on my local server with the same results you have now........showing in FF and not in IE.
I then opened the image up with PhotoShop, changed the color mode from CMYK colors to RGB colors and it works just fine in IE.
So..........I think if you'll change that, it will work. Or you can PM me, and I'll send you the one that I've already got changed.....either way........that'll get you going again.
Teach them to shop and they will shop today;
Teach them to Zen and they will OWN a shop tomorrow!