I notice in almost all the themes that they contain what seems to be BMP images with transparency. This is very puzzling, since my understanding is that this isn't possible.

Does anyone know how this is done? I'd really like to experiment with making skins but without the ability to use images with transparency, I'm severely limited.

Any assistance would be greatly appreciated.

nevermind...I found the answer in the help/skinning tutorial.
I kinda figgered you clever folks must have done something like make a setting to allow "auto-transparency".

Well done!