Just found a PNG demo on the web which is quite impressive…..making use of the alpha channel and layers. Try to drag the sun and bird!
If you click on the link and found that there is a gray background on the three layers (The sun, the bird and the shadow), it is because you are using IE! IE has terrible support on PNG, which should be a replacement for GIF. But as IE doesn't support it, it is not popular…….what a waste……. And this also shows the problem of a market which is leaded by a particular company….not the web standard.
More info on PNG if you're interested.