Yes you can, but i think you can only alpha in psp 7.0. i have photoshop so i dont know how youd do this so just look in a tutorial. ill post a link to one later if i find one.
Photoshop > PSP, that's just plain how it is. If you can get it, get Photoshop. Plus, who uses 7 anymore anyway. Get CS. It has alpha-ing without targa plugin.
