Transparent images with C# WinForms

I was in a similar situation a couple of days ago. You can create a transparent control to host your image.

using System;
using System.Windows.Forms;
using System.Drawing;

public class TransparentControl : Control
{
    private readonly Timer refresher;
    private Image _image;

    public TransparentControl()
    {
        SetStyle(ControlStyles.SupportsTransparentBackColor, true);
        BackColor = Color.Transparent;
        refresher = new Timer();
        refresher.Tick += TimerOnTick;
        refresher.Interval = 50;
        refresher.Enabled = true;
        refresher.Start();
    }

    protected override CreateParams CreateParams
    {
        get
        {
            CreateParams cp = base.CreateParams;
            cp.ExStyle |= 0x20;
            return cp;
        }
    }

    protected override void OnMove(EventArgs e)
    {
        RecreateHandle();
    }


    protected override void OnPaint(PaintEventArgs e)
    {
        if (_image != null)
        {
            e.Graphics.DrawImage(_image, (Width / 2) - (_image.Width / 2), (Height / 2) - (_image.Height / 2));
        }
    }

    protected override void OnPaintBackground(PaintEventArgs e)
    {
       //Do not paint background
    }

    //Hack
    public void Redraw()
    {
        RecreateHandle();
    }

    private void TimerOnTick(object source, EventArgs e)
    {
        RecreateHandle();
        refresher.Stop();
    }

    public Image Image
    {
        get
        {
            return _image;
        }
        set
        {
            _image = value;
            RecreateHandle();
        }
    }
}

PictureBox has 2 layers of images: BackgroundImage and Image, that you can use independently of each other including drawing and clearing.

Put the big/bottom image on a PictureBox, then add a handler to the OnPaint event and use one of the e.Graphics.DrawImage() overloads. You can load the image using Image.FromFile().

The small/top image will have to have an alpha channel and be transparent in the background for the overlay to work. You should be able to ensure this pretty easily in Photoshop or something similar. Make sure you save in a format that supports the alpha channel, such as PNG.