PHP's bundled gd doesn't properly handle transparent truecolor pngs.  At the time it bundled gd, neither did gd, but 2.0.11 handles it now.  Some of the files in PHP's libgd report having been updated to 2.0.11 (gd.c, revision 1.41), but either the update wasn't successful or not all of the files have been updated yet.  I tested this with 4.3.1 and swapping in php4/php5 CVS head's libgd as well - same problem.  It works when linking to a real gd 2.0.11 install.  I'm adding this as a bug so it'll be easier to keep track of this problem.

Here's a test case that will show the problem.  Note that if you use IE on win32 to view the result, it'll look like it failed even if it didn't, as win32 IE has its own issues with truecolor transparent pngs.

<?php

// Example demonstrating a transparent truecolor png bug
// fixed by the time of gd 2.0.11, but not fixed in php's
// bundled gd.

header("Content-type: image/png");

$image = imageCreateTruecolor(640, 100);

$transparent = imageColorAllocate($image, 0, 0, 0);
$red = imageColorAllocate($image, 255, 50, 50);
imageColorTransparent($image, $transparent);

imageFilledRectangle($image, 0, 0, 640-1, 100-1, $transparent);

imageString($image, 3, 0, 0, "If the background is black, and you aren't on win32 IE (buggy png code), this is a bug.", $red);

imagePng($image);

?>