Background Colors and Transparent Background Images

If the background image is a transparent GIF, the page is rendered so that the background color is "underneath" the image, and the color peeks through the transparent parts. Consider this (slightly obnoxious) background image:

background image with transparency test image

The circles in the image are the only parts that aren't transparent. Now let's put that image on a page with a blue background:

this code produces this

<BODY BGCOLOR="#AAAAFF" BACKGROUND="../graphics/bgtest.gif" TEXT="#000000" LINK="#0000FF" VLINK="#FF66FF" ALINK="#FF0000" >
this page

<BODY TEXT="..."> >>>

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this code	produces this
<BODY BGCOLOR="#AAAAFF" BACKGROUND="../graphics/bgtest.gif" TEXT="#000000" LINK="#0000FF" VLINK="#FF66FF" ALINK="#FF0000" >	this page