Models texture transparency [Solved]

Literally going crazy...

So my problem is that I can't get the transparency to work on models, no matter what methods I've tried, seen few on internet but none of them worked

What I've already done...

24Bit .bmp (Not accepted) / 256 Colors works, but no transparency / 256 Colors (Last one edited to black, bottom/right) no transparency again / 8Bit bmp (which is the good one, worked, but no transparency, only black)

Model edited in all instances with Jad's Model Viewer on Textures tab, check Transparency, didn't work, tested on all from above...

It's always like this http://i.imgur.com/A6WMC.jpg no matter if I check/un-check Transparency on Textures tab, so the problem on texture, but honestly no idea what to do anymore and in how many ways to save it in order to make it work...And no idea where to go and ask.

Looks like I've been doing it wrong, used Flash's tutorial and worked fine so far, here's the link to it http://www.youtube.com/watch?v=Tnip3DzYqdQ&list=UUMKDX7_JR-hAolFrCOqMgKw&index=22&feature=plcp