Ah! Darn those drop down menus!

Thanks for the help Journeyman, and thanks for the luck ARTIMUS! I have transparency now, but i'm still having a lot of difficulties. If anyone wants to take pitty on a newbie and tell me what I'm doing wrong, that would be nice...
The top image here is what it looks like in skin studio... and the bottom image is what it looks like applied. The shadow turned some freaky color and a white border appeared around the window!