Hi, I'm new to GIMP, and I am looking for some help.
I want to take an image, remove the colours, make it transparent and use it as an overlay to put over another picture to use as a pattern.
I managed to get to the point of removing the colour ( mostly) but I can't seem to get the transparency thing to work.
Does anyone have step by step instructions to do this?
Thanks in advance to anyone who takes the time to help me out!

Hi. Welcome to GC. The layer needs to have an alpha channel for transparency. Right-click the layer in the layers dialogue and choose "Add alpha channel". If it's a particular colour you want transparent you can choose colours/colour to alpha.

OK - But Perhaps, I should say I am unfamiliar with GIMP, and need this step by step.
I add alpha channel, and then it makes that layer background (?). I need it to be able to sit over a picture.... So confused...I end up with a black and white checker board? What do I do with that?

I am a little confused by your question. You say you want to remove colors from a picture and make it transparent.
Are you talking about removing the background around a picture and make the background transparent or making the actual colors in the picture transparent?
Do you have the image you are working on that you could post?

The checkerboard represents transparency. If this is what you want, you can save it as an xcf or PNG and open it on top of the image or simply open the image as a new layer (file/open as layers) and drag it to the bottom of your layers dialogue. If you just want reduced opacity use the slider at the top of your layers dialogue. You could also experiment with different layer modes. (click on where it says "Normal.")

I would like to take a stab at this if I may. Not knowing what you understand or not I'm going to put this in Readers Digest form. Super Simple.

1. If you have the image you want to use as an overlay open, then you need to add the Alpha Channel like Erisian said. To do this, right click on the image layer in the layers dialog (shows all your layers). You will get another little menu that pops up and there you select Add Alpha Channel. If you have no other layers or background layer, then you will see that checkerboard effect which means there is nothing behind/under it or Transparency. When you save this image as a PNG, it will save it without any background and you can place it on top of another layer later on and not have to deal with the background.

2. To remove the colors from your image and make it "greyscale" Go to Colors>Desaturate and just select Average. This will make your image Black and white and greyish.

3. To use this adjusted image as an "overlay" as you stated, go up to the top of the layers dialog and find the slider for Opacity and adjust it to your liking.

You may find it useful to make a white background layer just to use while you are working to be able to see everything better until you have your other image open underneath the one you are using as an overlay. Hope this makes sense. It's basically the same thing Erisian was saying just stated differently. Hopefully betwen the two of us it will click for you. If you need a screenshot or two just holler and we'll git 'er done!

Thank-you everyone for your attempts to help. I think I'm beginning to understand! That seems to make sense. Assume I know very little and you'd probably be right but I can follow instructions reasonably well. If I could just explain myself a little better...
Here is the picture I'm working with. You are looking at a beadwork piece. What I want to do now is to make it into a transparency so I can put a picture behind it and make my own pattern.

So, I will continue to work my way throughthtose instructuions, and see if I can do it. Thank again!

When I attempt to save it as a *.png I get a message saying I should export because
........PNG plug in cannot handle layer offsets, size or opacity
Merge visible layers.
What does that mean?

Do you mean you want to cut it out? If so, add an alpha channel as mentioned above , then use the fuzzy select tool ( ) on the outside then use ctrl X to cut.

If you're using 2.8, use edit/export not file/save. Apologies, you're using 2.6. Just select OK and it will export for you. Don't use flatten image because that will remove the transparency.

So I tried saving it as a *png, but when I opened it, all I get it is the checkerboard....
No I don't want to cut it out.
How do I re-size an image that I want to put underneath it?

You can either use layer/scale layer or you can use the scale tool ( )

WHOA! I think it worked!

Excellent!

So, How do I save it so I only get the part of it that is the overlay? Hmmm, not so good at 'splaining. I want to have th image with the transparent overlay, and the image underneath, just I want the underneath layer to be cut off where the overlay image ends......

Erision, you are brilliant! Thank -you so much for the help. It's really great of you to take time to help me out. Much appreciated.
I'll mess about a bit more, now that I seem to be getting the right results, and see how I do.

No problem. If you want transparency in your image, you'll need to make sure both layers have an alpha channel first. If not, then make sure your background colour in the toolbox is white. Either way, select your beadwork layer and use the fuzzy select tool on the outside then use ctrl X or edit cut on both layers.

Hope you don't mind me borrowing your beadwork. Fuzzy select wasn't a good choice for this. I plotted points around it with the free select tool.

If you have two layers and the one underneath (resized) is still slightly bigger, right click the top layer in the layer dialog and choose Alpha to Selection. When you get the "marching ants" around your smaller (top) image, go to Select>Invert to select the area outside the top image, then click on the larger (bottom) layer to make it the active layer. Hit your delete key and the bottom layer gets "trimmed" to the exact size of the top (selection) layer. On some occaisions you get a tiny bit of pixelization left over around the edges. To correct any leftover pixelization, Alpha select that layer (bottom) and go to Select>Shrink and enter a value of 1 pixel. Then go to Select>Invert and hit the delete key to remove a 1 pixel border on that layer. This technique comes in handy for cleaning up edges of a image that you have removed the background from but that's a whole other subject.

As far as saving is concerned, when you save as a PNG, It will save the image only and not the background but only if you tell it to. If you have more than one layer, you have to "Flatten" your image or Merge Visible Layers otherwise it will save just the layer that happens to be selected at the time you save it. Visible means you can actually see the layers or that the little eye next to the layer in the layers dialog is there. If you tick the little eye, it will disappear and turn off the visibility for that layer. This comes in handy if you want to merge several layers at once but not others. For PNG, you would turn off the visibility of any background layers and Merge all the others. When you save as a PNG, the Save dialog also has the option to "Save Background". You need to always uncheck this box if you want to make sure there you have a transparent background. If you open the PNG image in gimp you get the checkerboard behind your image indicating there is no background. When the dialog asks you to Merge visible layers, take a quick look at your layers dialog and make sure any background layers are turned off (visibility)

Hope this made sense and it helps you.