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I'd recommend using PNG instead of GIF in all situations; the compression algorithm is better, plus it isn't copyrighted (the GIF format's compression is copyrighted by Unisys, and thus by using it without permission you are technically infringing). IE does support straight-up transparency (not alpha-channel) like in GIFs, so its PNG support is up to par with that. Furthermore, PNGs are usually smaller and load better, depending on your browser's image library (Mozilla's is called Libpr0n).
As for making them transparent, this can be done in any respectable image editor, such as Photoshop or PSP. Look up '"transparency" and you'll surely find it.
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While the Banners initiate the outreach, eventually, the outreach becomes the Banner. - MysterE [more] 
Hybrid Mode
