Button Magic generates a special type of GIF image that contains an alpha channel. When applied to a Web page, the alpha channel describes which pixels are owned by the button (the foreground) and which pixels compose the background.
When the rendered GIF image is viewed, the browser makes the decision based on this alpha value whether to draw the foreground or background.
In an ideal world, there would be a smooth transition or blending between the foreground and background to avoid distracting edges ("jaggies"). Unfortunately, most browsers support alpha only in the form of GIF files with 1 bit of alpha, which means this transition is rather abrupt. This results in noticeable jaggies in the intermediate area.
The effect can be minimized by supplying a recommended color for Button Magic to pre-blend with. For best results, the color should be as close as possible to the background color of your Web page.
If the background of your Web page is an image, take care to choose a color close to the dominant color of the background.