Transparent Gif (PictureBox) on top of another PictureBox

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I am trying to do something really simple.  I have a small PictureBox control whose image is a GIF file that has some transparency (the white background is the transparent color).   When I stick this control on a form, it is indeed transparent, as the color of the form shows where the white used to be.  So far so good.
Now, I want to stick my small PictureBox on top of a much larger PictureBox, which is full of different colors.  When I do so, the transparent gif no longer works - instead of showing the colors behind the white, it is still showing the color of the form!  
In VBA (e.g. MS Excel VBA form, using Image controls) this is trivial - you set the backstyle property to transparent, and it works like a charm.  But in Visual Studio 2005 I cannot for the life of me figure this out - it should be simple.
thanks for any help on this!
 

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