IE7 handles transparent PNGs, and IE5.5 and 6 can use a proprietary filter to display them correctly.
Issue with the filter is that it can't be applied to tiled background.
The stats I have (massive europe-wide company dealing directly with all types of consumer) is that IE5 is below 0.1%, IE5.5 around 1.2% and IE6 still at 85-90% usage.
In entry analysis for our recent client (publishing company, technical book store) we found that IE5 is 1.2% which means approx. the same as Safari - it is a bit disappointing.
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