A couple of things to try:
There is an attachment to this post
that contains a graphic
with a transparent background.
Try downloading it, unzipping it, and running it.
See if you see a white rectangle around the round graphic
or (more likely),
see if you see the checkerboard-as-transparent form background shows through.
Use the download link on this vbHelper page
After unzipping the download,
run the project and see if the landscape picture shows
through the smiley sprite's eyes.
If both of these projects have graphics with transparent background when run then
I think you will know what you need to do..