Sure Ralph, i created them in photoshop and the shirt highlights and shadows (to make the texture) is a translucent layer that is a screen and/or multiplied. Then I have a layer that is just a plain color that turns on below the shirt and is masked to the appropriate shape of the shirt. That shows the color of shirt. Then there is a spotlight layer (which I have tried to turn off and on in various png uploads) that adds a nice highlight to the 3D shirt image. Then the background is trans parent as I turn the grey cotton layer off. My goal is to create a php script that changes a bottom layer div to allow for users to see the different color shirts. Then again I use "save for web & Devices" in photoshop to create the .png and .gif.
Does that help explain the image creation process?
Rubble, I can resize the image if needed, I tried that here: http://activestatedesigns.com/wp-content/uploads/Shirt-test-no-resize.gif. You can see that image is the last one in the thumbnail gallery and still it's not transparent when loaded into the preview. This was not compressed it was the right size to begin with.
Where can I find the option to set the resizing software? I don't know what GD or Imagemagick is? I create my photos in Photoshop then load them to my uploads folder in wordpress.
As a side note, I have also cleared my uploads cache but to no avail.