How can I 'cut out' a picture?

xzzy

aa
Jan 30, 2010
815
531
The texture needs an alpha channel to handle the transparency. That cat is just a normal brush with a texture (maybe an overlay, mapper could have done it either way) on it. The transparency "cuts it out."

The transparency is set up in gimp/photoshop, whatever paint program you use. Vtex.exe will automatically process the transparency. If you do your texture importing in VTFedit you have to click some checkboxes to enable transparency.