If you have the Layers window up(usually on the right of the screen), right click the layer, scroll down to "Add Alpha Channel" and click it.
Then either use the Fuzzy Select Tool or Select by Color tool to delete the white.
If you don't have that window up, go to the Layers tab, then Transparency, and do like above.
Also, I believe the face decal should be 256x256.
When creating new images, click on + Advance Options, then click on Fill with:, and change White to Transparency.
This will allow you to start with transparency without all these steps.
