Tranparent png's would be incredibly useful when used as an overlay on a print or a slideshow while allowing the underlying image to show through. This could be used for custom greeting cards, trader cards, and posters, adding faux frames and borders to images, and many, many more uses.
Wow. I was about ti write back to say that you're crazy (although I would have been more polite than to just say it) because I know I've tried this before. But you're right, it works. It's a bit flaky, but it definitely works. I'm not sure what my problem with it previously was... thanks for pointing this out Gene!
OK so from Photoshop CS5 I have the option to save as a PNG which still gives me the white backround upon uploading as a graphic to the Lightroom Watermarks. Or else When I save for Web I have the options of PNG 8 or PNG 24.. I tried both and they give me a white backround as well when uploaded... Do I need to change anything else upon choosing one of those in the Save to Web? Like there are boxes clicked that say perceputal, diffusion etc... Thanks for your help in trying to get this sorted out!