I'm having the same problem with Google Earth 4.3. There seems to be issues with any kind of transparency contained with models, as you said, whether applied using SketchUp's texturing tool or using PNG texture with alpha-transparency.

This is a real problem for modelling in sketchup for me as some of the best polygon saving features involve PNG textures for railings, fences and other small details.

Just before 4.3 hit my computer I had been working on a feature I called 'Glazed Panorama' where you build an internal box with a curved panorama of a rooms interior facing out and then add transparency to the window panel, giving the effect of depth and detail to the inside of the building. This has been put on hold as now all you see is the background, what a pain in the backside.

Please let them fix this. With the added emphasis on the importance of buildings inside Google Earth you would think that even a Beta build would not have this problem.

Also, the compression Google is using for the 3D Buildings layer is really fierce and lots of models with even the slightest extra polygon detailing seem to be mashed up good.