IMovie '11 & .png import problems

Hey everyone, I just upgraded to iLife '11 and when I'm trying to add a .png logo with a transparent background to my timeline it's adding a white background over it.
I've made sure that the image file didn't auto set to "Ken Burns" and in other projects I've been able to add the same file perfectly, without the white background.
Does anyone know how to fix this and/or if it's a bug with iLife '11?
Thanks in advance!

I am just dragging and dropping the .PNG onto the timeline.
Apple Man: Is there a different way to add in the .PNG to avoid any of the effects? It seems as soon as I drop it has the white background.
Tom: I'm Using "Picture in Picture" and just dragging and dropping it.
I reduced the file size down to 1600x900 and still the same problem:
http://dl.dropbox.com/u/125305/K-Titleframe4-01-02.png

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