What is the procedure to create a panel icon with a transparent background?

I have created just such an icon and it displays with a transparent background when viewed with gimp or konqueror or other graphics programs; but when when I install it to be used on the panel, it shows up with a white background. See a sample of the icon here: http://www.upquick.com/temp/psp.png

To install it, I right-click on the current panel icon, click "icon settings,"
click on the currently displayed icon, click on "other icons," enter the address where the new icon is stored: /usr/share/icons, and click on the desired icon (psp) and then click OK. But it still shows up with a white rather than a transparent background.

Have you solved it?

Yes, I did get an icon with a transparent background made, but I'm not sure how I finally did solve the problem. It's all a bit of a fog. I tried so many things that did not work, and finally one did work, but I failed to keep complete notes. Following are the last notes that I made and while I did not use 'gimp' (I think I used Paint Shop Pro running under wine), I finally did get the desired result.

http://www.youtube.com/watch?v=AC5vdKuwTp0

open gimp > open image with gimp > go to layer > transparency > click alpha channel > magic wand tool > click in white space > click delete > user razor (eraser) tool for touch up if needed > save as .png or .gif