If you are going to use the picture you want transparent in another picture the best way I have found is to use the magic wand holding down shift then going through and selecting all of the background that I don't want then while it is still selected I run the eraser over it with the biggest brush I have and use it over the whole picture then keep repeating the steps over and over again till everything is gone that I don't want then use the blur tool around all of the edges so it isn't so jagged around the edges then just copy and paste it to the new picture
the part where you said uses the transparency tool and set it to where a certain color is transparent I find that to be unreliable cause I might have part of the picture white that I don't want to be transparent
what I do is use the magic eraser tool and just click on the parts that I don't want or just do the steps above with the magic wand leaving out the part with the blur tool
If that doesn't answer your question just let me know and I will try to help you as much as I can
