All right, you've talked me into it, I'm giving it a go.
It's all new to me, though, including using GIMP, which I downloaded specially for this.
By the way, somebody needs to rewrite the instructions on the link that you provided. It's too vague, and it's no wonder that people may get discouraged. It's taken me a whole day to get as far as part 5 of the second set of instructions. I could have got there much quicker if it didn't just say ''do this, do that'' and actually explained what you are doing and why. For example - ''We are going to make a new pallette'' I didn't realise this until several steps down the line. At first I thought that I was supposed to be altering the size of the .bmp. Meanwhile, simply stating ''change the image to RGB'' without including ''press image, then mode, then indexed'' is bordering on the criminal!
I've edited this part, where I asked a question that I've now found the answer to.
OK, you are working in 256 colours, so basically in the dark ages. ...
If you were working in 24-bit (64,000 colours) there wouldn't be a problem, you'd just select alpha layer, and you'd have transparency. Here, the palette is the most important thing.
So, you go: Image, Mode, RGB.
Image, Mode, Indexed... 256 colours, OK
You probably don't have your palette visible, so:
Windows, Dockable Dialogs, Palettes.. shows the palette gui.
Now, look at the palette gui. It says Palette on top, and again underneath.
See the underneath one, look across, see the arrow head pointing towards palette..?
Click on that.
Select Palettes Menu, Import Palette.
Your palette will be imported into the Palette gui. It is at the very top.
Click on the newly imported palette, choose Edit on the bottom tab.
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See all the little boxes of colour. The ones you are interested in are the TOP-LEFT TWO.
Double-Click on the top left box, another menu opens, lots of colours.
... Choose Magenta 255,0,255
Repeat for the next box, on the line, this time choose Cyan 0, 255, 255
Save THE PALETTE, not the image. Name the palette something appropriate to the sprite.
AND save it sowewhere where you can find it easily.
Now you work on the SPR files, and name the 8 sprite files to suit what you want.
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You may get to see the sprite in the game, straight away?
But more likely you won't and you'll have to play with the palette, or try another palette to get the whole thing to work.
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EDIT:
Just in case someone is actually going to use this short "tutorial".
You need to stop blindly following a process you don't understand. Go google "how to make sprites" or "16-bit colours" or whatever and learn about WHY you are doing these things.
Then go look at Puma's work, see how he did his work, why do you think he did it that way?
For instance today, I've just noticed something I hadn't before, and am eagerly processing my sprites to see if I've discovered a much easier way of doing all of this.
I'll keep you posted.