Internet Explorer 6 appears to have PNG problems beyond its well-known transparency issues
IE6 has extremely weird PNG issues
Microsoft owes me another 4 hours of my life.
Just to let you know, apparently PNGs (without transparency, nothing to do with transparency on the page anywhere I was aware of, though there was a video and lots of other stuff), can simply fail to show up in the image tag. A completely normal img src style tag just doesn't display.
Using jpeg instead fixed it.
The problem came up on the awesome http://agaricdesign.com/note/sidebar-graphics-with-links-quotpromotional-badgesquot-agaric-drupal-way
Fortunately we were able to keep the technique.