OK I figured it out…
For you that have a similar issue, maybe this will help:
I found out that ie handles filters a little differently, the issue is with the browser itself, and not jquery. Whenever you adjust alpha opacity for an image with js, ie takes your transparent png and makes it opaque, instead fading in and out already transparent image. If anyone has a direct fix for this issue, please post it here, I found a workaround:
Simply do a conditional for ie, looks like this:
if($.browser.msie){
$(this).stop().animate({ marginTop: "-20px" }, 300);
$(this).parent().find("span").stop().animate({ marginTop: "28px"}, 300);}
else{
$(this).stop().animate({ marginTop: "-20px" }, 300);
$(this).parent().find("span").stop().animate({ marginTop: "28px", opacity: 0.5 }, 300);
}},
I basically turned off fading for ie, notice in "else" bracket, opacity is defined, whereas in .msie it is gone.
