This is exactly what I am trying to do as well. The game he is referring to is Second Life. What is needed as an end result, is an image with an alpha channel that acts as a mask, so it is essentially just black or white. In game, the masked areas are displayed as transparent. The end result must be a TGA file with an alpha channel. In photoshop this is easy to do.

Prior to XXP, that wasn't possible. I am wondering if it is easier at all to do it in Pro now. For example, I read somewhere that it now has import/export of photoshop format. Not sure if that's true or not. The goal would be to be able to create an alpha channel mask which could be exported in a format that eventually could be converted to TGA with an alpha channel. I have photoshop, so that can do the conversion, if Xara can export an alpha channel as I described.

Thoughts?