Because PNG transparency was not accepted when IE made their first-draft PNG renderer, so it's showing the default "transparent" color, magenta. It's fixed now.
IE version 6. 0 and earlier versions do not do good job display png files with Transparency. There two reasons behind this phenomenon: comparing apples oranges and using bad tools.
Internet Explorer is an outdated software. It depends of the version you are using. A recomend you the version 8. Or change it to Mozilla Firefox from i am writing right now. But maybe you don't have a plugin.
