Firefox 0.9.3 displays it right (has the right status bar text too). By the way, even with that filter IE doesn't display it quite right, it actually darkens the image slightly for some reason.
if(obj.style.filter.substring(0,50) == "progidXImageTransform.Microsoft.AlphaImageLoader")
{
obj.src = "blank.gif";
window.status = "IE is using PNG filter";
}
Then it should stop it messing up if the user makes there browser says it's a different browser, and if it's an older version of IE then it will still display a picture.
No, for graceful downgrading reasons (basically so people can make webpages in newer CSS versions without it not working on anything but the newest browsers), browsers automatically assign undefined properties to "".
Here's an automated way to allow alpha channels in IE 6 and still display an image in most other browers.
Make a blank image called blank.gif and put it in the same directory as your file (or remember to change it in the javascript).
Insert this somewhere in the body part of your file (browsers that don't support the filter style don't ignore it if you change it with javascript):
< img id="dxalphatest" style="width:0px;height:0px;filter:filtertest" /> (remove the space at the start)
(Note that this will actually invalidate your document (if you actually care) because filter isn't a real CSS property.)