OK after searching the forums ive found out that nose-art files are supposed to be bitmpas 64x64 with background 176,176,176 seemed easy enough to do in paint. However i seem to have hit a snag. The files also need to be in 256 colors.. but when I try to save as 256 bmp the colors change and the background is no longer 176,176,176 .
Im fairly new to windows 7 and dont have a clue how to get around this. If anyone has any suggestions/solutions id be really grateful. Ive spent 3 hours today just trying to get the darned background right 
Your using Windows Paint right?
Paint does that and is horrible at converting from one depth to another.
You need to use a better program that has better conversion algorithms.
I use my screen grab editor (Snagit), or Fireworks export utility wizard to retain quality and create an accurate representation of the intended work.
Neither of these are free programs.
If you have something like photo-shop or illustrator I am sure those will perform equally well.
Oneway