Help me at photoshop so I can sleep :(

[fustercluck]

I suck at photoshop, can't get anything done. Here's the jist, trying to get this picture to work as a "spray" in source (valve/steam) games: http://fustercluck.webs.com/thumbs_up.jpg

Steam only allows images that are 256x256. I want the white area of that picture to instead be transparent. No matter what I do though the background always comes out white in game.

I was able to do similar things to this a few times in the past without much trouble, using this tutorial: http://www.fpsbanana.com/tuts/6610

But now for the life of me I can't get the background to be transparent. I don't know what I'm doing wrong, been over the guide (and other guides) many times and don't see what I'm missing. Been at this for at least 2 hours (time flies when you're having fun ) - Can anyone help?

It's not about some dumb image...it's about me vs photoshop. Photoshop is my enemy, not my friend. I must win!

 

[destrekor]

do .png files with transparency preserved not work?
That's how we do transparent backgrounds for our avatars here.

 

[yhelothar]

converted to a transparent png for you

it's a tedious and time consuming to do it with an eraser. Use select -> color range to easily cut out solid color backgrounds.
But first duplicate the original layer, then delete the original layer.
Then after you've done the color range, press delete.
Save as a gif or png.. voila!