8-bit PNGs with alpha transparency are images that can contain semi transparent pixels, unlike regular 8-bit PNGs. The main advantages over 32-bit PNGs is that they take up less space, and degrade more gracefully with IE6.
Few editing tools support them, for some reason.

More info:

• http://blogs.sitepoint.com/png8-the-clear-winner/
• http://www.communitymx.com/content/article.cfm?cid=E4024