Adding transparency

Icons generally have transparent and may have semi-transparent pixels. If you have a graphic with no transparency, and you want to mask out e.g. the white parts, you have to do the following:

Open the image file.
Choose Filters | Remove Matte and select White matte.
Choose the OK button.

This will make a partially transparent, 32-bit icon, because lighter pixels will have less alpha than others. However, you might want to create an icon from a bitmap e.g. by converting all red pixels to fully transparent and keeping the other pixels opaque. This can be done as follows:

Select the Wand (W) tool and set the tolerance to 0% in the Tool Behavior dialog box.
Hold down Shift and click on all parts of the image which have the color to be converted to transparent.
Press Ctrl+Del.

Note that you can also use the Recolor (Q) tool for this purpose, by selecting the color you want to remove as the background color and the transparent color as foreground color.