Very Basic PSP7 Question

OK, I have been trying to do something very simple with PSP7 (unfortunately I'm not very good with these programs) but I figured it out once before and it wasn't hard. What I want to do is take an image and make it very transparent. The idea is to then overlay the transparent image onto another image so it has a "ghost like" effect. But, I can't get it to make the image transparent.
Does that make any sense?
Like I said, I did this a long time ago and it was very easy. Here is the photo I did a while back, I made a desktop for my friend with a picture of his car and a Confederate Flag overlayed, I want to do something simular and I can't get it to work.

Can anyone help me?
Does that make any sense?
Like I said, I did this a long time ago and it was very easy. Here is the photo I did a while back, I made a desktop for my friend with a picture of his car and a Confederate Flag overlayed, I want to do something simular and I can't get it to work.


Can anyone help me?