e allora viene chiamata questa funzione:

function nereidFade(object, destOp, rate, delta){
if (!document.all) {
return
}
if (object != "[object]"){ //do this so I can take a string too
setTimeout("nereidFade("+object+","+destOp+","+rat e+","+delta+")",0);
return;
}
clearTimeout(nereidFadeTimers[object.sourceIndex]);
diff = destOp-object.filters.alpha.opacity;
direction = 1;
if (object.filters.alpha.opacity > destOp){
direction = -1;
}
delta=Math.min(direction*diff,delta);
object.filters.alpha.opacity+=direction*delta;
if (object.filters.alpha.opacity != destOp){
nereidFadeObjects[object.sourceIndex]=object;
nereidFadeTimers[object.sourceIndex]=setTimeout("nereidFade(nereidFadeObjects["+object.sourceIndex+"],"+destOp+","+rate+","+delta+")",rate);
}
}

che come vedi usa filter.alpha.opacity che è proprietaria di IE...