Another great way to create an alpha channel in PSP, and the technique I prefer as it does not require a contiguous selection, is to do the following:
1) Create a transparent background - the bottom layer needs to be transparent. (Note - if you are starting from an image that you want to add transparency to, right click on the Background layer, and select Promote Background Layer. Then right click again and select Duplicate. Select the original background layer, press CTRL-A to select it all, and press the Delete key to make it transparent. Anything you select and delete on the layer above will show the transparency below).
2) Create your work on additional layers above the background - any transparent parts should show the underlying transparency from the background beneath it.
3) Once you are ready to create the alpha, go to the Layers menu and select New Mask Layer-->From Image.
4) Choose Source Opacity for the mask layer in the dialog box that pops up.
5) After it creates the mask layer, go to Layers--Load/Save Mask--->Save Mask to Alpha Channel
6) Save the Mask into the alpha channel - note that if the image already has an alpha channel, save the new alpha channel with the same name as the first one to overwrite it.
7) As an additional technique, before you save your file, use the eyedropper tool to select the darkest color in your image. Select the background layer, and use the flood fill tool to fill it with that color. This will sharpen the edges of the transparency and reduce the halo effect.
Save the file as a Targa TGA file. It will be 24 bit color, with an 8 bit alpha channel - thus 32 bits.
Using this technique, you can keep items on various layers - you do not have to flatten the picture to select.
Hope this helps
