Does anyone know how to get rid of the white square behind the sprites.
Make sure your files are saved in .PNG or .GIF format.
Make sure you have updated your graphics card drivers!
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It also has to be made transparent using a program like Paint.NET (or Photoshop or Gimp, if you're that fancy <img src="smileys/smiley17.gif" border="0" align="middle" />), in addition to being saved as a .PNG or a .GIF.