1. Open it with Paint Shop Pro 7
2. Increase brightness by 8%, so that the black trousers become slightly lighter (required only if you plan to use black color for transparency)
3. Use the "flood fill" to fill the background with black (I set the "tolerance" to 110 in order to remove the picture anti-aliasing, which causes an outline to appear when viewing the picture on a dark background)
4. Click Colors -> Decrease Color Depth -> 256 colors (choose the "nearest color" option)
5. Click Colors -> Set Palette Transparency. Choose black color.
6. Save the picture as .GIF
Note: the reason why I used black color for transparency is to avoid the bug of the white outline that appears on Windows98 when using the picture as a sprite for the 3rd Person plugin.
