Changing a picture into a vtf

I’m not sure how this is done, so could someone please convert this for me? I would really appericate it. http://imageshack.us/photo/my-images/441/ghostparticle.png/

http://dl.dropbox.com/u/960458/ghostparticle.vtf
It was 120x120 so I had to increase the canvas size to 128x128 to get it to save.
The way I did it was by opening it in Photoshop with the .vtf plugin installed, then saving it as VTF with the DXT5 setting, DXT5 is for transparent images, DXT1 is for non-transparent images.

Thank you so much! :smiley: