javascript won't do it i'm afraid, i've never tried an opacity setting in CSS, but if it's not in the official "standard" for CSS (and possibly even if it is) IE probably doesn't implement it.

you could try with medium alpha PNG files? that way, your image files contain the translucency (alpha) information in the pallete (or in each pixel). they could work in modern versions of IE...

if that doesn't work for you (I've never actually tried PNG translucency in browsers), you could always try good old fashioned screendoor transparency? XD
by that method, transparency is just "removing" pixels, the more pixels you remove, the more transparent a picture is ^_-

EDIT: Just a quick follow-up, translucent PNG files DO work (in Opera atleast).. To make a DIV background color transparent, use a small translucent PNG as the (tiled) background image. =)

EDIT (2): And just to follow that up again, translucent PNG's do NOT work in IE (version 6 atleast), maybe they work in IE7, I don't know. It might end up an IE-only screendoor job ^_-