From: Daniel Piechnick
Hi Troy. Jpegs cannot have transparent areas in them. If you try to save a transparent area in a jpeg, Photoshop will make it white. You'll have to save your image as a gif file. Gifs aren't good for saving photographs, and they can look a bit "dotty" as they have to do their best with 256 colours, but this is your only option here. Also remember that the edges of your image will be "jaggy" where the colour meets the transparency.
