Traditionally, when cutting up a Photoshop layout, we all used to think of the entire thing like a jigsaw puzzle. Overlapping elements were an illusion because the element that appeared to overlap was really being cut up and then fit back together.
And then came the png. While the PNG most definitely has issues across the different browsers, there are ways to get it to play nicely with whatever site being built. Yes, it usually involves a CSS hack. No, it does not validate. However I believe it is more important to start thinking of a layout as a series of layers overlapping, versus the traditional jigsaw puzzle.
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