[Fingers]

Can you define "bizarre"?

If it's all screwed up, typically with horizontal streaks, this is usually caused by the mask not being the exact same size as the JPG. Other kinds of problems may occur if you have the wrong MASK filename in the icon sheet's .ini file. Also, the mask needs to be in 8-bit greyscale format so it's just one channel.

The most foolproof way would be to just use a 32-bit TGA file with the alpha channel included. PNG support is not quite there in many paint progrems.