!I finally figured out how to make backgrounds transparent. It is really easy and simple
1. When you open Paint.net you are automatically given a white canvas/background and if you click the BLUE SQUARE BOX ON THE UPPER RIGHT SIDE which is labeled LAYERS
you will see that it is already named BACKROUND.
2. Across the bottom of the LAYER BOX that you opened there are icons. Select the first one, OR from the LAYERS menu in the UPPER LEFT SIDE select ADD NEW LAYER
(this will prevent your image from being placed on the first canvas/backround so you can make that transparent without also erasing your image)
3. UNCHECK the box next to the Layer named BACKROUND (making it transparent (as represented by the gray boxes)
4. From the FILES menu open the image that you have chosen. It will also be named BACKROUND in the layers box but that is ok
5.Use the MAGIC WAND from the TOOLS on your left to Select your image area and then use the EDIT menu and choose INVERT SELECTION, then click COPY from the same EDIT menu
6. PASTE the image on top of the previous canvas which you have already made transparent