XWE does this job automatically, all you have to do is load the image and it will convert it. This is the easiest method to convert an image to something SRB2 can use, so I would recommend you do this.
If you want to convert the image to the palette for SlumpED, then it will be a bit tricky. The first way is to use MS Paint. To make it work in MS paint, you first need an image that is in the SRB2 palette already. This image is in the SRB2 palette already, so you can use this. (
http://wiki.srb2.org/w/images/f/f6/Palette.png) After you got your image saved, then you can draw over the picture using the tools in MS paint, and it will still be in the palette when you save it. You can even copy and paste the picture you are working on into that picture, and it will convert it to the palette. Then you save the edited picture as one of your frames, and you are done.
The second way, is to get a graphics editor that supports transparency. I know GIMP can support it, and I think GraphicsGale can support it. Once you do that, open the image you are working on in GIMP. In the menu bar, click Layer, then transparency. You should see something that says Add alpha channel. If it isn't already greyed out, click it. This will make it so your image can have transparent parts. After you do that, click the fuzzy select tool (it looks like a magic wand), and set the threshold to 0. After that, you select the background (which is usually light blue or cyan) and press the delete key. The image should have a grey checkerboard background. After you did all of that, save as a PNG, and load the image in SLumpEd. Convert it to Doom GFX and the background should turn Cyan
The third way is easy once you get it set up, but the setting up is hard. We will need an image editor that can support editing 8-bit Palettes. GIMP and GraphicsGale can do this. Once again, we will need an image that is already converted to the SRB2 palette (
http://wiki.srb2.org/w/images/f/f6/Palette.png). Now, you will need to get the palette from that image. I will explain how to do it in GIMP. In the menu, click the Windows Tab, then dockable dialogs, then palettes. Right click anywhere in the white space, and you should see import palette. It will look like the image below.
Click on that, and then you will see a new window where it has an option of where to select the source. Click the option that says "from image". After that, you can give the palette a name, like "srb2 palette" and then click import. After that, you can save any image to the srb2 palette easily. To do this, you need to click on "Image" in the menu bar, then click on mode. You should see an option where it says "Indexed". Click on that, and there will be a new window that pops up. Select the option that says "Use custom palette". From that menu, you select the SRB2 one that you just made. After that, you should select the color dithering to None (There might be situations where you want it, but in most cases, it doesn't look good for SRB2). Save the image as a BMP, and put it in the wad with slumped, and you will be able to convert it to DOOM GFX with no problems.
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tl;dr - Use XWE instead.
