Battle Charaset issue

[Kyokudai]

Oke, let me explain what  i am trying to do, I was tinkering around with that character generator, I soon realized the Charset cannot be matched in the battleset (part for part) so I had watched a demo for VX where the guy used the world map character in the battle mode and the sword just swung while the character marched in place, etc. So I had made a few characters I wanted to use in the battle mode so I thought why don't I just use the character set like that one person did, so I got a template for the placement for Battlecharacters and set this up and while she shows up fine in the little viewfinder in the animations screen, it's when I try to add a weapon that is where the problems happen, it appears like there is some box surrounding her and the weapons appear behind this box and partly shows. It's kind of hard to explain and you may have to just try it to see.

My question is, is there some particular color or way you have to save it to work. I have downloaded a few custom battlecharacters from here like Laharl and they work fine....I am working on them in PS Elements 7 and saving for web as a PNG-8 (which is the only one of two it will let me save it as other is PNG-24).

[Kyokudai]

Ah, I think I figured it out, I needed to save with the pallette set to adaptive, I was saving as selective she works, it reminds me a bit like Lunar

[Prpl_Mage]

Well, when you import it. You just have to click on the background in the preview.
The flashing colour is the colour that will be transparent in the game.