Paint.NET or your favorite image editor w/ transparency support, PNG 32-bit support.
For the noobs, I will try to be as thorough as I can, but you still have to acquire all the files yourself easy (unless you can't use google)! For those that are familiar with PS2 classics injection and package install, I simply delegate the encryption to the console with MultiMan. This technique was honed using out-of-date instructions that either are obsolete and missing tools, or require you to use that ugly 'placeholder' pkg, and also sweat, tears and sleepless nights. For HAN Users, there is an easier method (Link) by is a guide for PS3 CFW users inject your own PS2 games into pkg format for those who only get black screen and unsynced controllers following all other 'ancient' guides, aimed mostly at noobs.