O.K. Since I was having this problem like many other people I have decided to write up a tutorial on this. Short and simple.

1. Open Photoshop

2. Create a New Document with the following settings: 320 (width) x 480 (height), with the background color set to transparency.

3. Keep your background layer transparent and create a new layer. You can put anything you want on the new layer.

4. When you are finished. Do a Save As... not a Save for Web and Devices...

5. Use this image in Pwnage 2.0.1 - it should load up with no problems...

I hope this helps.

200x200 worked for me

i still cant get it to work errrr =[

****, accidentaly i click it dont work, but it works thanxxxxxx

Your missing a very important step.
When clicking save as you have to as it as a flattened png.
Then click options and change it to png 8 and then alpha transparency or channel.

Then it will work for sure.
and it's 320X480 not 200X200.

???????????? Using his steps above the ONLY option it gave me was Save as a copy, it wouldn't let me save as a channel, but then, I'm in CS2 so it could be that....

thanx alot guys this finally works

Sorry but this will not work for just any image.. At least in WinPWN
There are a few parameters that must be met to get it to import. It will work on a SIMPLE DRAWING but not on an AVERAGE PICTURE. I’m working on a tutorial on how to make anything you want into a boot image along with the “how’s and why’s” will be examples of what looks best... But it will take a bit (LOL but not forever)...
Thank you tho....

Is there any other program I can use to edit PNG files for boot images? Preferably free. I dont have 1500.00 for CS3. Thanks!