transparent gifs if they want a certain font i
this is poorly phrased, a font/image replacement does not need to be a transparent GIF(or PNG), and in many case use no transparency at all.
OK, semantic of the question aside.
I don't think GRAPHICAL navigation are old school at all, but today you have more choices on how to go about it.
1) good old fashion graphics (be they GIF, JPG, PNG etc; transparent or not). Sometimes the effect you are trying to create just works best with a raster image. It also has the broadest support.
2) But in the case you just want to use a special font for navigation (or other things) MANY (not all) modern browsers, support web fonts. Again the things to consider are: your target audience's browser, storage /copyright issues, and is it worth it do have the user d/l a whole typeface (or two) if you could have made the same nav sprite for under 12KB.
3) Level:ADVANCED! on a completely different extreme, there are web fonts available out there which re composed of navigational graphics and icons. This can offer fully scalable, customizable graphical navigation. Of course it can also be confusing for users with their styles off (or who don't support webfonts).. as they may see the letter 'k' instead of a neat little 'home' icon.
All methods have they place , their advantages and their disadvantages. Simply casting one way of doing things aside, summarily, is never a wise move.