OK, I am not keen on layers.

I have looked on the Layers dialog box and I have not seen any list there at all.

I have used the wand selection tool to select the area I want to be above the transparency and I have copied it and ....

Wait, I just pasted it as a new image and it seemed to have just created an image with a transparent background. I just might have unintentionally solved my issue.

Layer - Transparency - Color to Alpha should do the trick, although I've never used it.

If I have a flat image, I guess I will have to create the layer. There is no way to just select a color as a tranparency?

xarzu said:
Also, what file format should I use to make sure it works and when I use the image it will be transparent where I say it should be?

If you are using it for a website, use PNG format.

Open the layers toolbox. (Ctrl+L) Right click on the layer you want to be transparent and choose "Add Alpha Channel". That will add the transparency to that layer, so when you select/delete the background will be cleared.

How do I make a color on my image the transparent background to my image?
Also, what file format should I use to make sure it works and when I use the image it will be transparent where I say it should be?