I think the pink border you're seeing may not be actual magic pink, because color shadows from the png are mixing with magic pink background making them not a true magic pink. 

What I usually do is flatten the image in Photoshop, and then use a square brush and color over all the pixels I want invisible with magic pink (255-0-255). 

Maybe somebody else has a better way of doing it, but that's how it's been working for me.

Here is a trick you can use to make your background for sysmetrix with a .png. I hope I describe it well enough....

You need 2 images, one a plain solid color (any color will do). This you save as a .bmp. the second image is what will show as your background. Make this one anything you like, and save it as .png with all of it's transparency and shadowing.

The .bmp is technically your background but you will not be able to see it when done. Create your sysmetrix file the standard way, using the .bmp as your background image. Once your theme is created, you can see the plain .bmp on your desktop, leave that as is for now.

Now load in your .png image as a GRAPHIC, and set it to be on bottom of everything else. That way, everything you add will be above it.

Heres the best part...

Check that box and the plain background will dissappear, leaving only the graphic image showing. You now have your .png image as your background. Note: do not check this box until you have your graphic .png loaded in! If you do, you will have a transparent SMX and wont be able to find it on your desktop!

Let me know if this is not clear enough and I will try to be more detailed.

Thanks Xiandi. I actually knew of the method you wrote about but here is my problem with it. When I use this method I find on certain desktop backgrounds the transparency of the bmp is not 100% transparent. So yes you see the png image fine but always has a faint transparent background especially on multi colored wallpapers. That is why I found the magic pink to be a better solution. When it is used the background is always 100% transparent. It would not be a problem if the image was rectangle or square because you can crop right to the image edge thus eliminating the background. Hope you understand my thinking. 

Yep, I've seen that. When that happens I just move the SMX or whatever is under it .

Your way works too, it's just harder because of the pink and the choppy rounded corners.

xiandi really, really hates magic pink

When you paste a PNG with alpha transparency components over the pink background, the transparency of the png allows the pink to 'show through'. But it becomes changed from 'magic pink' to some other shade of pink. So using that final image in a program which uses 'magic pink' as a transparency colour will not hide the mottled pink colour that now shows through the image.

The 'trick' I guess is to realise that the alpha transparency is going to have to show some kind of colour through.

1. Try pasting the png as a layer over some other colour that suits the image better than pink.

2. Merge the layers so that the png and the other colour become one.

3. Now use a 'magic select' tool (usually looks like a wand in image editing programs) and select the background colour.

4. Fill the selected area with magic pink.

This will now leave you with an image that has magic pink around it (which will show up transparent) and the image will have your chose colour 'showing through' instead of ugly pink.

Here's a series of images to illustrate:

1. The png with alpha transparency

2. Pasted on a solid blue backgrouns

3. Blue 'magic selected' and replaced with magic pink (see the left over blue around the outside?)

4. How it would look if I put it straight on magic pink like you and then displayed in a program which uses pure magic pink as a 'transparency'

5. How it looks it in a program which uses magic pink as a transparency doing it 'my' way.

curious question here.

is there some restriction to only use bmps for this program? not only is there more flexibility using the pngs but the file size is about 60% smaller than a bmp.

so, the background image is the size of the gadget/widget and you superimpose the pngs onto that bmp?

I should also say that the background image (bmp can be the actual image) and then you just add the extras ie.clock hands or any thing you want within the software itself. There are options when creating the skin for graphics, guages, multistate images and so on. You simply put the images in the skin folder and and add them with the options given within the program. It really is quite simple. Even I can do it. For me its just a matter of getting the graphics right.  I have made a few now that I got lucky on.

I'm gonna have to dig into the smx again. I remember awhile back experimenting with smx skins. I don't remember all of it but I do know that in some programs magic pink isn't necessary. If I'm wrong then so be it. It was worth a shot though. 

Nice blind and cursor you got there JC.

Then I stand corrected. Like I said, it's been awhile since I delved into it. Time to brush up on a few things. Thanks Xiandi for putting mine brain back on straight. Lol.

Could be its blended in with  the screenshot. Merged like it would be when you merge the layers. On the wall its sitting on top not blended or merged.