I finally remembered how I did it. After getting the tiles from 'background,' (which makes the bmp in sbx/tools/work) I usually minimize SBX and to the work folder and open that bmp with my paint program ( PSP). I then can make any color changes if i want to, and save, then make my blend mask which is actually an alpha channel or acts like one. I then save as... using the same file name but ad _B and save as .tiff.
Now bake in SBX I compile. When done. work now has my bmp, my tiff, the inf file and the photo.bgl. I can then rename photo.bgl as as I wish. Put this into my scenery and stick a fork in me, I'm done.