The PNG image format has three types:
If you usually use Photoshop then at this point you may well be thinking "What's this PNG32 thing?". Well basically PNG32 is PNG24 but with support for full alpha transparency. This means you can have varying degrees of transparency for each pixel, whereas GIFs can only have transparency turned on or off for each pixel. Therefore, when placed on complex or ill-matching backgrounds, transparent PNGs will have nice smooth edges.
Yes I know what you're thinking, "But Photoshop can produce alpha transparent PNG images!". I know! It just doesn't present it to you correctly and that's what had me confused.
Being a keen advocate of Adobe Fireworks I have always realised that PNG32 was the only PNG file type to support true colour alpha images. However, if you regualrly use Photoshop then you'll know that "Save for Web" only offers PNG8 or PNG24 file types in the drop down.
As I'm sure most of you know all you do is tick the "transparency" box in "Save for Web" and you get a alpha transparent PNG. But really what this is doing is creating a PNG32 graphic - Photoshop just decides to hide this from you. Strange...