How do I make the graphics I pick up at other sites have transparent edges to blend in with the background color of my page?

Well, first of all, to be blunt, you should not be picking up graphics from other sites. This is stealing and is a violation of copyright laws. Please don’t do it.

However, if you are making a graphic from scratch in Paint Shop Pro, Photoshop, or Photoshop Elements there is a way to make the background transparent or match it to your blog’s background color.

Paint Shop Pro transparency tutorial and another.

Photoshop/Elements transparency tutorial.

NOTE: .jpg does not support transparency. You’ll need to use .gif or .png

Updated to add: A few comments have pointed out that you can use graphics that you’ve legally downloaded via a subscription or online royalty-free site. This is true. You’ll want to read any site agreements, though, to confirm what you can and cannot do with those graphics.