This is my toolbar.  I set it up to be as useful to me as possible.  Everyone has their own likes and dislikes, but there are a few things I'm going to tell you that really need to be there.  Just to go over what mine are, they are from left to right:

There are only a couple of things on there that I don't use all the time.  The majority of them saves me a lot of time by just clicking quickly on one of the tool options.

For this tutorial, the 3 options I would like you to add is the Set Transparency, Decrease to 256 Colors and Increase to 16 Million Colors.  If you have never customized your toolbar before, go to File/Preferences/Customize Toolbar.  You add and remove from the box that comes up.  You can also arrange the order they are in on your toolbar.  See the full Customize Toolbar Tutorial.

Ok, so you have added those 3 options I said I wanted you to add?  Good, let me show you why they are important.  They will be very useful in file saving too.  I'm going to open two images, one a gif and the other a jpg.  The one on the left is the gif, on the right is the jpg.  I have the gif active.

Conversion up from a gif to a 16 million color jpg, or down from the 16 million colors to a 256 gif is very simple.  I just click the up or down arrow to change the file type I am working on.  And here's another good thing about having those two options on your tool bar.  Sometimes you will either open a file that really isn't 16 million colors, or you will copy a gif and paste as a New Image thinking it's now 16 million colors.  In this next image, I have copied the left gif and pasted it as a New Image.  But look at my arrows.   I need to increase the copy to 16 million colors.

With the Reduce to 256 Colors and the Increase to 16 Million Colors added to your toolbar, you will find it very easy to convert your files back and forth while you are working on them.  It will also be a way to notice right away what format your file is that you are working on.  Think of it as a little flag waving at you telling you that you need to either Decrease or Increase a file's colors.

I have noticed that a lot of files seem to be much bigger in KB size than they should be.  There may be a good reason for this.  When you go to save as a psp file, click on Options.  This is what your settings should look like.  The LZ77 compression makes a smaller file size with no loss of quality.  You would be surprised at the difference this can make.  Right now is when I would also like to add a note for people who make tutorials.  When saving screen captures that involve the grey boxes and text, always save as a gif file.  It makes a much nicer looking image.  The only jpgs in this tutorial are the ones where I have the cat images.