due to the lack of any real help in this thread I will try.
Does Photoshop 5.0 LE support layers?
If it does you can try this:
I have also never used an LE version of PS so some of the detail may be wrong, this is also based on PS 5.5. and my recalection of 5 is a bit hazy.
a: make sure your image is a fair bit bigger than the icon you are creating.
1. Open the layers window
2. Is your current graphic on a layer called 'background' if yes go to 3 if not it's on 'layer 1' or somthing skip to 4 if it has a transparent 'checkaboard' background skip to 5
3. Select the 'background' layer in the layers window, and select Duplicate layer from the 'Layers' menu. This will create a duplicate of the background layer called 'layer 1', click on the eye next to the 'background' layer (in the layers window) This turns off the background layer.
4. Using the magic wand tool click in the white area and press delete, your icon now has a transparent background.
5. select 'new layer' from the 'Layers' menu. and select it in the Layers window, drag the new layer up the list so it is above the layer with the graphic on it.
6. Command click the layer that has your graphic on it in the Layers window. This creates a selection based on whats in that layer.
7. go to the Select menu (in 5.5 its in a Modify sub menu) and select expand. in the dialogue that appears set a setting of 1 and click ok.
8. Go to the Edit menu select Fill, select black from the dropdown.
9. Select menu All (command 'A')
10. Use the Gaussian blur filter to soften the edge of the black.
11. using the arrow keys 'nudge' the black into the correct position so it lookes like the shaddow.
I hope that helps. This may have been better posted in the 'Art & Graphic Design ' forum
