Your issues are a lot deeper.. There are known issues with IE versions not supporting the transparent value.. Not so sure about Firefox.. There are some tweaks and tricks but often they do not work so well.. Flash really does not support the transparent value either but it will still work, however slower.. You might find using "wmode" value="opaque" better..
You can place the flash button in a container which seems to work better but not always.. But, putting Flash over a Flash has other issues partially if one or both are animated.. Here you can see on this floating Flash over Flash, that as soon as the rotation starts the Flash stops.. If you button is animated it can cause issues....
My advice is to begin to use PTP V2, where so much more is possible and the IE issues are mostly eliminated.. That way you can use the Simple Button using a PNG with no issue at all.. Each case is different in using Flash, what might work for my media might not work for yours. There are variables.. Like the version of Flash used to create the media.. The browser version and type...
You can experiment with this in your header... You can read a lot of stuff about IE and using the IF and ELSE statements for IE versions..
<!--[if lt IE 9]> This is less then IE9 ELSE this is all browsers: firefox, chrome, etc. <![endif]-->
<!--[if gte IE 8]><!--> //your style or script <!--<![endif]-->
IE with flash and transparency have many issues.. I have recently had some of my own but I have decided to put it into the too hard baskets.. Eventually IE 9 and below will be a thing of the past with so few users of it that it will not be an issue.. I am not an expert with this, I just experiment and test until I find a fix..
The code I provided above was just an example for you to get some ideas from.. Its not a pano code..