jQuery overlay with external page not fading to semi transparent (IE problem?)

I've used the example external overlay with external page from here http://flowplayer.org/tools/demos/overlay/external.html to get pretty much what I want. However the example has a nice faded semi transparent background that works 开发者_开发百科in IE and Chrome. My attempt works in Chrome fine but in IE8 it doesn't fade the background. It is white and not transparent at all.

Is there a fix for this? Where have I gone wrong?

Thanks