I learned a new web trick today.
Apparently, Photoshop's inability to save PNG-8 with alpha transparency is not a limitation of PNG-8 but a limitation in Photoshop.
For years, I have been operating under the assumption that I need to use PNG-24 to achieve transparency effects in my web projects. This is usually a compromise in terms of file size and browser compatibility (requiring ie-specific hacks). But it doesn't have to be...
Fireworks to the rescue:
- Open your big Photoshop-exported PNG-24 with nice alpha transparency in Fireworks.
- Change the file format to PNG-8.
- Change the transparency option to "alpha transparency"
- Rebuild and export your PNG-8
- Revel in the MUCH smaller file size
Bonus points for ie6 compatibility!