Login Image Plugin image has black background ....

I'm 0 for 2 here on plugins. Was unable to upload logo using logon-image plugin, but realized from php error I was getting that I needed to create folder in wp-content for logo... now when I upload an image the logo is off center and has a black background, this applies as well to using the stock wordpress logo, it too is transformed to black bg ...

http://s8.photobucket.com/albums/a22/tracedef/?action=view&current=Picture1.jpg