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If u want to use tranparancies or animation, make sure you save the file as a .gif - It's a slightly larger file, but allows these added features, where .jpg doesnt.
I use PSP7 like most people on here, but photoshop is definately a good package too. For ease of use, stick to PSP.
You can download their free (official) trial at www.jasc.com It is fully functional 
If u need help with making it work (cracking), give us a PM.
PS.
My sig is so boring cos I got fucked off with my old one I'll get round to making something new soon!!

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