It's actually possible to make PNG transparency work in IE 5.5 and up, though it's a bit of a hack. You use essentially DirectX to load a PNG and render it on the page. There are a few limitations, and it will never work as smoothly as it does in browsers that properly support PNG's, but it's better than nothing.
Here's a page that describes how it works:
http://homepage.ntlworld.com/bobosola/
Here's a page that describes how it works:
http://homepage.ntlworld.com/bobosola/