Found the problem. Internet Explorer does not natively support the multiple levels of transparency (alpha channel) offered as an export option in Xara Xtreme. However, there are HTML coding work arounds.
See: http://koivi.com/ie-png-transparency/
I have also found that if I export my PNG's as 256 colors and check the background transparency box, it displays normally in my browser.
Don't blame Xara. Blame Bill Gates.
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