Fun isn't it.
Have a look at
PNG Behavior (WebFX) for fix for the PNG transparency problem. Somewhere on that site is also a behaviour which fixes the :hover under IE6.
You can also use 8bit PNG as they will allow IE6 to have a transparent colour without having to do anything else, the only problem is the edges look horrid in IE6.
Also make sure you use a strict DOCTYPE as IE6 will behave a little better, but also make sure you have no characters before the DOCTYPE as otherwise IE6 will go back to quirks mode.