If you're saving in DXT-3 it works exactly the same way in FSX. The light gray alpha channel will work fine for FSX. I've never gotten the "send to editor" thing in DXTBMP to work either, I do it manually. My procedure:
1. Edit texture file in photoshop or paintshop pro
2. Save file as a 16-bit targa with alpha
3. Create alpha-channel bitmap, usually just the light gray as Kim says
4. Open DXTBMP and load the .TGA file from step 2
5. Import the alpha channel created in step 3
6. Save as extended bitmap, usually DXT-3 format
The resulting .bmp is a valid texture file for MSFS.
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Scott M. Stone
WWA1712 - Cat-III - Director of Aircraft
VATSIM 1018857 - C1 Controller - KZSE
Private Pilot - ASEL + Complex + IFR (almost)