I think my image is transparent, but I am seeing a grey background appearing around the edges of my image which is round. So instead of nice transparent round ImageButton I am seeing square edges. I need to provide height or it complains but now I have outline of grey/silver square instread of just round image.
Set this attribute in your ImageButton XML android:background="@null"
<ImageButton android:src="@drawable/yourimagename" android:id="@+id/thebuttonid" android:layout_width = "wrap_content" android:layout_height = "wrap_content" android:background="@null" />