Heya Stickpig,
The nose art has to be a bmp (bitmap), 64 x 64 and 256 colors (8 bit indexed.) By the way you are explaining it, you want a transparent background. Make your background color 176, 176, 176. Now place your squad logo on top of this background color. Put this new bitmap into the CO's "squads" folder and name it after the squad CO like this....
redhawk.bmp
Have the CO log into the game and go to O' Club and click on Squads. Click "Upload Nose Art". It will generally take a few days before it is approved by HTC and available to all members on their a/c.
Let me know if you need help bud.
ReDhAwK