Why does a b/w JPEG become overexposed when I place a PNG in the same file?

Question

I'm creating a black-and-white ad in InDesign. The background is a JPEG edited in Photoshop (converted to grayscale, cropped, added two black rectangles, one on top, one on bottom with a gradient). I added multiple text boxes and then went to place one of three logos (created and saved in Illustrator as PNG-24) into the file. As soon as I place it anywhere in the document -- on top of the JPEG, four inches away from the JPEG, anywhere -- the JPEG goes to maximum brightness and looks terrible. If I add the logo as a JPEG, everything is fine. The problem is that the logo needs to have a transparent background, which you can only get with a PNG as far as I know. I also tried saving the background JPEG as a PNG, but it comes out similarly overexposed. What do I do??

Answer 1

What you are seeing is the effect of ID's shift to overprint prview quality when transparency is introduced. Grayscales are actually mapped to the black plate, and output as part of the document working CMYK, which may display lighter or darker than the preview of the grayscale. The image should look the same as it does without transparency on the page, but with overprint preview selected, and this is the actual output you can expect when you output to the current CMYK working profile.
You can use the black channel fro the CMYK profile as the gray space when converting to grayscale in photoshop if you want to have the most accurate rendition in both applications.
And if you are creating the logos in Illustrator you shold probably be saving as .ai or PDF, rather than PNG, which is a raster format.