You can use PSP to make ship graphics. I'm quite sure it can output 32-bit (RGBA) .tga files as it's a very common file format. However, I have not used it myself.
OK... when I tried doing the graphics a few days ago, I could make it but then when I saved it as a .tga file, it would merge all the layers. Perhaps I was doing it wrong. I'll try it again.
I keep putting that off... Maybe next month if I remember (We're trying to submit something to IGF with the deadline being 9/30, and I'm shipping another game at work that's kept me really busy for the last year)
Hmm, I was wondering if it's possible to make completely invisible spaceships by simply making a completely black/blank alpha channel on the ship graphics. Maybe Fingers could help? I'll try it soon anyway.
Well, i don't mod all that much but the problem i see is that enemy ships wouldnt know its invisible so if you have a three way battle the ai would just attack it.