Alpha Channel for selective transparency?

Can someone point me to a tutorial or part of the manual that tells me how to implement a traditional alpha channel on a simple material? It doesn't seem to work in the way I expected it to.

I should probably delete this question. However I've found this tutorial that solves the problem/answers the question, and two uncertainties in the tutorial that, if you follow explicitly, need to be addressed. So for those not familiar with channels and photoshop...

http://unity3d.com/support/documentation/Manual/HOWTO-alphamaps.html

In the last, crucial steps, selecting your "main" layer means your original image layer. Make a selection based on this, by as they say, command clicking, and then save it as "alpha" selection (don't give it a name if you have no other selections and it will automatically be named this).

Do not follow the tutorial guide to clicking "new channel", as if you follow explicitly this will give you a NULL selection (all black).

All the other earlier steps are to make "play nice" colors around your selection so any blend outs from your selection are the colors you expect rather than jaggy to black, white or other jarring color.