Basically, what I'm looking for is a basic image editing software able to make PNG files with alpha (aka transparency). While MSPaint does have the ability to save as PNG, it doesn't have any way to manipulate the alpha of a color (at least not that I've found; feel free to correct me if I'm wrong and point out where it can). Any tips? I'm about as far away from a professional image handler as can be, so I have no need of the top-of-the-range software out there (Photoshop etc).

http://www.gimpshop.com/

gimp, made a bit more like photoshop. And it has the benefit of being free =)

So, uh... how do I use it? Downloaded, installed, opened, and got three windows: The Gimp in the background, Layers/Channels/Paths etc, and The Gimp as a smaller window. Where do I paint? The only thing under File is Exit, so there seems to be some rather critical elements missing somewhere...

Welcome to gimp. No one really knows how the interface works.

If you put in the right button sequence on it, it'll turn your computer into a flying six-legged beaver-bison hybrid. No one had figured it out yet though.

up-down-up-down-down-down-left-right-A-B-select-start?

Also, I love their forums. Out of 15 topics on the first page, ten were spam. Yeah... I'm starting to lean towards uninstalling.

Never heard of that Gimpshop modification, I just use the plain Gimp program. Pretty sure that should be able to do what you want and I've never had any problems with it (beyond it loading really slowly, but I assume that's just my computer). Though as an aside, if all that's under File is Exit, I'd guess something went horribly wrong... as in the actual Gimp it has lovely options like... New... and Open...

yeah, I just use normal gimp myself, but had installed gimpshop awhile back for my wife as it made following photoshop tutorials easier... :shrug:

Try just gimp if gimpshop isn't working for you. Or try to track down another freebie.

Yeah, GIMP seems to be doing the trick.

While it's not as good as Photoshop, I use paint.net

http://www.getpaint.net/

as a free alternative. It does what you want, at least. (only for Windows, though)