Well the WB kids skin heavily uses transparency and I don't see any problem with the screenshot; do you have any transparency problem with this skin ? (you should not!)
How do you set transparency in your skin ? do you use an alpha channel directly in the PNG image or the "alphacolor" attribute in your xml ? I am asking because I found recently a bug in transparency handling in PNG bitmaps, so I would expect it has been *fixed* in the most recent version and not broken. As for the "on-top" problem, it could be a problem specific to windows as I don't see it on linux...
Maybe you can give us a link to your skin so that we can check and fix the bug if any.
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