IE6 is a constant burden for web developers. It really is impressive to see how many ways it continues to aggravate. To put it lightly, it is the devil.
One common issue is the lack of support for transparency in images. Most web developers would prefer to use PNG images while dealing with transparency. Just about every browser, including later versions of IE, support transparency in this image format. With the exception of IE6. IE6 will display the PNG with gray where the transparency should be.
There are a number of ways to get around this. Such as the popular belated PNG script which applies a filter to the image to resolve the issue. One problem with this script is that visitors will still see gray until the script runs and re-renders the images, causing a flicker effect. There is also the PNG Alpha Fix script which takes a similar approach, but uses an htc file.
Sometimes it's easier to use GIF images to get things looking right in IE6. Yet, IE6 has its issues with this format as well. When rendering the image it will decide if pixels are completely opaque or completely transparent. If you want certain pixels to have 50% transparency you will run into this problem. It causes the images to look blocky, as if traced.
So, what I normally do is take the PNG and convert it to a GIF while attempting to preserve the partly transparent portions as much as possible. Let's assume you are going to be placing the GIF in an area with a consistent color scheme. For simplicity we will assume this background is white.
Let's say we have the following PNG.
First open your PNG in Photoshop.
Now make a new layer, beneath the original, filled with the expected background color (in this case white).
After merging the two layers zoom into the image so that you can work on a pixel by pixel basis.
Add a vector mask to the layer. We will use this to get rid of as much background as possible. I like to create a new layer, filled with something vibrant like red, and place it beneath the main layer. This way it is easier to see what pixels have been erased. Now select vector mask and use the pencil (1px block, 100% opaque) to hide as much as the background as possible. In this case we will hide any white or nearly white pixels.
Once finished with the vector mask hide the red layer (if you had added it) and save the image as a GIF. When you add it onto of an area with the expected color you should not see the blocky effect.
This will also work well on top of a gradient, as long as the gradient is not too severe.
http://www.sitepoint.com/blogs/2007/09/18/png8-the-clear-winner/
In fact, you should use GIFs if possible (assuming there are a limited number of colors involved).