[Tex/LaTex] LaTeX producing black background with transparent png

graphicspng

I am trying to use png images that are transparent. This is an example of my LaTeX file (I am intentionally putting the images on top of themselves):

\documentclass[10pt,letterpaper]{article}    
\usepackage{graphicx}

\begin{document}
\begin{picture}(0,0)

\put(0,-350){\fbox{\includegraphics[height=4in]{baseimage.png}}}        
\put(0,-350){\fbox{\includegraphics[height=4in]{overlay.png  }}}    

\end{picture}

\end{document}

However, the top image looks like this:

enter image description here

The actual image just has a colored line, and no background. I've searched thoroughly online to find whether this any reason for this, and cannot find one.

The top of my log file says that my LaTeX version is the following:

This is pdfeTeX, Version 3.141592-1.21a-2.2 (Web2C 7.5.4) (format=pdflatex 2012.8.30) 

and I cannot spot any errors in the log file.

I've put one of the png files that I am using here.

Best Answer

You have to use a newer version of pdfTeX, e.g. by installing the latest TeXLive or MikTeX.