since I found that ie7-8 doesn't support the css: background-size property.
I try to look for solution.
I arrived to your demos page and seem you have the solution for me,
I just don't know the correct syntax,

what I need:
I have div that has background image and in the div there is img - that make the border the the background image, the edges of the image must be transparent so that we can place the picture on different backgrounds, but I do not want to see the background image , so I resized the background image.
The problem is that IE does not support background-size .
Do you have a solution?

I attached pictures show the normal and problematic situation

Unfortunately the current release of PIE does not support rendering of background-size.

Based on the screenshots you sent, it seems like you could achieve this with a plain <img> with a white border and border-radius.