I have the following CSS:

All LIs will have a background of green, and the first-child which is orange was ignored.

Oh, very interesting! I hadn't thought of this since I never use the :first-child pseudo-class due to IE6's lack of support.

The way PIE works is it inserts an element as previous-sibling to the target element. So all of a sudden, PIE's element is the first-child rather than your first li element!

I can't think of any way around this at the moment. I've opened ticket http://github.com/lojjic/PIE/issues/issue/54 so it's logged as a known issue. It may end up going into the documentation as an unavoidable caveat.

The problem is easily fixed if you add an additional selector to your CSS:

I don't think a fix in PIE is worth the effort.

btw: BIG THANK YOU, jason - PIE is awesome!