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1. Firstly open your ordinary source image - in this case a jpeg.
Go to tool bar - Masks, New, Show All - click ok through the prompts that are displayed and then - Masks, Delete. This now means when you erase something it will erase it, not just make it white. As confirmed by a checkered background wherever you erase.
2. You then need to cut out, or isolate the parts of the image you wish to keep (i.e. the bits that are NOT going to be transparent).
This can be done using the freehand/lasso or magic wand somehow but I find the easiest tool is the Eraser (8th icon up on the left hand tool bar) this acts as a rubber surprisingly enough and will erase whatever it covers. Set this to size 10 and you will get a nice soft edge on your image. And then quite simply erase all the bits that you want to be transparent in the final plugin.
3. If you are picking out a single image then now you should have a checkered outline around the image (you'll understand what I mean if you actually are doing this) if you dont wish to waste time manually erasing the rest of the picture then you can use the "freehand" or "Lasso" tool and set it to "point to point". You can now click at major points around the image (i.e. each click creates a pivot, and you simply want to select your image by clicking around the perimeter in the checkered bit) then go to crop. Or just erase the rest manually its up to you.
4. Now you will have an image surrounded by / or featuring lots of grey and white checkers, this is good . Head up to the masks menu again, and select "New", "From Image", and then click the "source opacity" radio button in the 'create mask from' section, then click OK.
5. Off we go to the Masks menu again, this time there is an option to "Save to Alpha Channel" pick this and hopefully you should see a black/white preview with white being the original image and black being what will be transparent. Click OK and OK again.
6. Finally we need to save your image, go to save as and pick the file type as TIFF (Tagged Image format) then choose options and select uncompressed. Click OK, and when content click save, and then OK when it asks tells you it will be saved as a merged image.
You now have a nice quality tiff file with transparency.
Any problems with my tutorial here and give me a yell @ firstname.lastname@example.org or on here as a reply.
Hope this averts some stress in newbies like myself