XP Skin and TreeGadget problem

[Perkin]

I'm using an icon in a TreeGadget.

If I use a png (16x16 24bit) as icon in TreeGadget
Without XP Skin support, it seems blocky
if I use an *.ico file it's fine.
If I'm using XP Skin support it's fine.
(Even when using Windows Classic style)

So does enabling the XP Skin support alter the way images are used?

[Fred]

May be XP skin allows alpha channel support for standard image (ie: not icon). To be verified.

[Perkin]

Also maybe related...
Using WinClassic style

With XP SKin Enabled the icon and entries appear 3 pixels further right
than they do if XP Skin disabled (touches edge of gadget).
Also top entry is 1 pixel down or touching

Also affects other styles, but using WinClassic it's most noticable as they should be the same.

Edit: spelling.