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Try something like the following:
1. File>New 32px x 32 px 8 bit transparent RGB resolution 72
2. File>Place (I used a transparent pdf file for the cursor image)
If you use the place command , uncheck antialias in the tool options bar.
(if you don't have a transparent image, then select it and then New>Layer via Copy.
so you can add the black background)
3. Ctrl click on the image layer to load a selection around the image, then go
4. Go to the channels palette and click the icon on the bottom that says
Save Selection As Channel (makes a alpha 1 channel)
6. Fill the bottom layer with black and flatten the image.
7. Convert to the index color mode Image>Mode>Index Color.
8. Save as in the cursor format with alpha channels checked in the
save as dialog.
Cursor in action: (there is a shadow under the cursor, you just can't see it
in the screenshot)
Message was edited by: MTSTUNER
Thanks for the detailed response. Since my initial post, I went online and found a freeware app called "RealWorld Cursor Editor." I was able to create the cursor I needed with that, but I'm glad I know how to do it with Photoshop. I'll try that sometime. Thanks again.