I just read this tutorial for the first time today, and it's actually really helpful. I never understood fully the different file types.
Also, I usually flatten the image in Paint.NET, select all, and, after copying, undo all of that. Then I open Paint and save the image as a .BMP, so I can upload it to Photobucket, but now I guess I'll start saving them as .PNGs.
My method, though long, makes it so I can later come back and edit the image, in the original .PDN format.