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Awesome, I actually started using z-index on a couple projects recently. It really doesn’t make sense to merge a bunch of separate “objects” in Photoshop just to keep stacking order and visual effects. Too bad about that transparency… it can be tough matching colors with 8-bit and matteing.
I’m glad to see others using the concepts. And while I probably won’t be using the Karova site anytime soon I’m glad it was built so “progressively.” Hooray IE7!! (though I hate IE in general) ;)