Transparent GIFs are great for banners, non-rectangular buttons, separator bars, and accent images. The entire GIF isn't transparent, of course, just one of its colors. The transparent color is usually the background color, letting a non-rectangular image appear to "float" on your page. Here's a set of simple examples:

The X and the O are each transparent GIFs. Each of the cells above contains either the X image or the O image, with the different background colors of each of the table's cells showing through.

In PSP 5 and 6, the method for making transparent GIFs may seem a little complex at first. With the current background color set to the color you want to be transparent, select Colors | Set Palette Transparency. (If your image has a color depth greater than 256, you'll then be prompted to reduce the color depth.) In the Set Palette Transparency dialog box, choose "Set the transparency value to the current background color" and click OK. Then save your image as a GIF. You won't notice any change in your image, but you can see the effect of the change by choosing Colors | View Palette Transparency. Don't be alarmed to see a checkerboard pattern in the areas that you want transparent -- that checkerboard is simply how PSP indicates transparent areas.

There's usually some ghosting around the edges of the foreground figure in transparent GIFs. To minimize this effect, try using a background color that matches the dominant color of your page's background. For example, if your background looks like green silk, use the predominant shade of green in the background image as the transparent GIF's background color.

If you want a transparent GIF that will look pretty good on several different colored backgrounds, try a neutral background color such as medium gray, experimenting to see what works best. In general, don't use one of the colors in your foreground figure as your transparent color, which can give some rather odd looking results.

If you want to use your transparent GIF as a button, don't forget to set BORDER=0 in the IMG tag. If you do forget, you'll get a highlighted rectangular border around your non-rectangular image, which probably isn't the effect you had in mind.