PNG Transparency with PHP

Hey having some trouble trying to maintain transparency on a png when i create a thumbnail from it, anyone any experience with this? any help would be great, here's what i am currently doing:

$fileName= "../js/ajaxupload/tees/".$fileName;

list($width, $height) = getimagesize($fileName);

$newwidth = 257;
$newheight = 197;

$thumb = imagecreatetruecolor($newwidth, $newheight);
imagealphablending($thumb, true);
$source = imagecreatefrompng($fileName);
imagealphablending($source, true);

imagecopyresized($thumb, $source, 0, 0, 0, 0, $newwidth, $newheight, $width, $height);

imagesavealpha($thumb, true);
imagepng($thumb,$newFilename);

I have had success doing it like this in the past:

$thumb = imagecreatetruecolor($newwidth, $newheight);
imagealphablending($thumb, false);
imagesavealpha($thumb, true);  

$source = imagecreatefrompng($fileName);
imagealphablending($source, true);

imagecopyresampled($thumb, $source, 0, 0, 0, 0, $newwidth, $newheight, $width, $height);

imagepng($thumb,$newFilename);

I found the output image quality much better using imagecopyresampled() than imagecopyresized()

Forget the color transparency index, it never works in all rendering products. Instead use an alpha layer mask:

$image = imagecreatetruecolor($size, $size);

imagealphablending($image, false);
imagesavealpha($image, true);

$trans_layer_overlay = imagecolorallocatealpha($image, 220, 220, 220, 127);
imagefill($image, 0, 0, $trans_layer_overlay);

Those functions access the underlying gdlib library, which is a fine toy, but not something that makes for nice results. If you have the option, use imagemagick instead. The downside is that there are currently no good php-bindings, so you need to access it over the shell, which you're usually not allowed on shared hosts.

See dycey's answer to "How do I resize...". Essentially, you need to fill the entire background with transparency before you do any other operations.