Well, I hope this is the answer you are looking for. I am currently using AtomicFE and the plug and play system. I simply took the default emulator pics and opened them in paint. Then I used the fill tool(paint can) and filled the entire background with a default off-pink color, around the emulator image. Then I set AtomicFE to ignore the off-pink color, and the emulator image appears on top of your background, without a big square around it. I have used Mamewah in the past, and I believe you can set it to ignore certain colors, just like in AtomicFE.