Make a greenscreen ingame. Use green glow print bricks. Take a screenshot of the angle you want. Open paint.net and magic wand the background out. It makes a perfect image with no white pixels around it. If the item is green, I use red.
EDIT: And about the trans circle. This is what I do:
-open the default icon of any item.
-Eyedrop the color of the circle.
-Add a new layer.
-Use the paintbrush tool and adjust the size to the same as the circle. Click once to paint the circle.
-Select the whole document and copy.
-Clear everything on that document and remove all layers. You want a blank trans document.
-Paste the trans circle you made. Then add a new layer.
-copy and paste your Item image into the new layer. Resize and move it to where you want.
-Merge the layers. Save as.
Note: when resizing your image, when you shrink it, then make it big again, it will become blurry. Undo and try again if this happens.