Web designers should use PNG graphics format because of its suport for multpile levels of transparency.
I gave the 'tanis' graphic a drop shadow in photoshop. you would not be able to see the background behind the text or through the shadow were this image a gif or a jpeg or a bitmap.

It has come to my attention that even the latest version of IE for windows does not support png's transparnecies very well. try a real browser, like Mozilla.