You need to save it as .png (transparent) or it will continue to have a background. Default is white.
I don't know what programs you can use to do this other than photoshop sorry
Kecleon's shiny doesn't have its own custom icon. It might seem weird to add one since Kecleon is almost invisible, but in the shiny you can see the distinguishing features on his head/stomach so maybe you could use those?
Got everything and more from luis, sorry for keeping the thread open. I was waiting around for another user but I'll lock the thread to avoid confusion. Thanks though :] @Blanca Weiss