I have updated to 7.66, the drivers are definately up to date on my ATI video card, and I checked that I had the most up to date DirectX drivers. Still the same issue.
I was thinking alpha channel also firelord, but I haven't checked that yet. It is good to know I am not the only one having the issue, but it would be great if someone had a solution.
Maybe I should put this in the bug reports.