This doesn't appear to be in the archives, and I get asked this constantly, so I'm submitting it so I can refer people here instead of responding to emails all the time. :-)
Microsoft Internet Explorer in OSX has a bit of a problem displaying PNG files. The seem to work fine when embedded into HTML document, but when you attempt to view them "raw" (e.g. dropping a file onto the window, or browsing a FTP site) they will not load. While at first this appears to be a bug in MSIE, it's actually linked to the Apple Quicktime plugin, which will override IE's default settings!
I'm not really sure if this is the fault of Apple or MS, but here's how to fix it.
Step 1: Go into the Quicktime control panel in System Preferences. Under the plug-in section, click the "MIME Settings..." button. Expand the "images" category, and deselect the "PNG image file" option. This tells the quicktime plugin you no longer wish it to attempt to seize authority over PNG images in your web browser. Now you are finished with this step, so click OK to save your changes and exit System Preferences.
Step 2: Launch IE and go into the preferences. Go to the "File Helpers" category. Sort by extension, so you can find the two (2) ".png" categories (titled "PNG Image [image/x-png]" and "Portable Network Graphic [image/png]"). Edit both these (click "change") in the last category "Handling", change to "View with Browser" for each. Once you have done both, click OK to exit preferences.
Step 3: There is no step 3 (although I'm sure someone will suggest "use Omniweb instead!"). Your settings in IE will stick unless you change the Quicktime preferences back to the defaults, which will override the IE ones the next time you launch.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20020327093859941