If you have Office 97, then you should also have a program called Microsoft Photo Editor. One of the buttons on its toolbar will give you the caption "Set Transparent Color" when you hold your cursor over it. When you click that button and then click on your image, it will allow you to make whatever color you clicked on transparent.
For example, if you had an image of the Wing Commander logo with a blue background, you could click on that blue background and make it transparent. Now, when you load that image on a web page, the background for your Wing Commander logo will be the same color as the background of the page.
(Remember that there are many other ways to set transparency besides Microsoft Photo Editor.)