I've been given a site layout and a flash navigation to incorporate which requires transparency. However, using wmode='transparent' the results are highly inconsistent across browsers using the latest Flash 10.
In IE7 the sample page works perfectly fine. In FireFox3 (Win) the colors are incorrect in the flash. In Safari/FF3 (Mac) the Flash is not transparent at all.
I can use z-index to send it behind everything for the same effect, but then the divs on top do not allow the menu to be clicked.
I made a test page to demonstrate: http://quietmind.biofeedback.net/test/so.html
Setting wmode to transparent can cause some strange problems, but this one is new to me. I would suspect that you're doing something a bit odd with the transparency in the swf itself which causes the plugin to mess up the calculations. Start by looking into that. However, try to avoid wmode transparent if possible, it's a performance hog at best and can cause a whole bunch of strange behaviours (although the messed up colors can likely be avoided)