I can't reproduce what you're seeing with Photoshop CS5 (nor Photoshop CC). Whether or not a black dot is on a layer that's transparent or colored to me the result comes out the same (though I had forgotten how incredibly slow Photoshop CS5 was to Smudge).
What version of Photoshop CS5 do you have (in other words, do you have the latest update, 12.0.4)? Do Help - System Info inside Photoshop to find out. I kind of remember problems with Smudge that were tidied up in an update, but I don't remember the specific version. In any case, I tested here with 12.0.4.
Thank you for the reply!
I currently have the 6.2 update.
I will try and install the 12.0.4 update right now, thanks!
What's the "6.2 update"?
Edit: Never mind, you're likely talking about Camera Raw 6.2.
Help - Updates in Photoshop should get you both the latest 12.0.4 Photoshop version and Camera Raw 6.7.