I wish I would have known that TreeMagik doesn't export into a texture format that MED can use.. It generates PNG and JPG files, and MED will only open BMP, PCX, TGA, and DDS.

I can convert the files to BMP and PCX, but for some reason the leaves lose their transparency.

Do I need to set the alpha somehow?

EDIT:
I figured out how to convert to a format that supports transparent layers (TGA) using photoshop, but in order to create the alpha channel, I have to go through and manually lasso every area of white around the leaves, which is very time consuming. Perhaps someone knows of a way to highlight all of the transparent color quickly?

Thanks,