Make this "Clear" to me

[DrunkenTroll]

Im makeing a skin that im almost finished with and I cant figure out how to make things invisavble so thay dont show up on the game model. such as a tail or long ear. how do I make these disapear? I think its called alphaing but I would like a step by step instructions. Im useing Paintshop pro 7. please help me (and no the skin doesent look like crap =P)