Use a 32bit TGA. Load it in Diffuse channel, and disable Alpha. Drag-copy into Opacity, enable Alpha, set it to Mono Channel Output. (IIRC, don't have max open)
Apologies if this comes across as a very basic question. However, I'm trying to setup alpha's on planes for use as hair, I've looked around at a lot of tutorials and nothing seems to be working too well for me. I'm using Photoshop and have saved out some test alphas with alpha channel enabled and such, then put those…