I completed the particle system tutorial on this website :)

http://creators.xna.com/en-US/education/gettingstarted/bg2d/ExtraCredit

I want to work towards making my own images to use as textures to become cool particle effects.  I want to confirm an idea I have and then ask for guidance.

1:  The "transparency" of an image loaded as a texture in XNA is determined by its alpha values.  (Correct/Incorrect?)
2:  Is there another way to define alpha transparency?
3:  What is a good program (one that is free please!) that will let me label that alpha/transparency of an image file.

Thank you.

CreatorEn5:

2:  Is there another way to define alpha transparency?

Yes, Color Keying.

In the game studio properties window of your texture files, if you expand the Content Processor property, you will see Color Key Color and Color Key Enabled properties. If Color Key Enabled is true, then any color in your texture that = the Color Key Color (default Magent 255, 0, 255) will be 100% transparent.

CreatorEn5:

1:  The "transparency" of an image loaded as a texture in XNA is determined by its alpha values.  (Correct/Incorrect?)