The easiset way to make a decal is to open one of the included decals (contained in the /halflife/logos/ directory) in paint shop, or whatever.
Then draw your little icon and and save it as a different filename, this way you dont have to bother messing around with image sizes and colour depth.
Then goto the "Mulitplayer" section of the Mod you wish to select the decal for and then "Customize". Then you can scroll along and select your custom decal.