Jaspike, you must convert the file. You can't just change the extension.
To take out the background in an image you would need to use something like Photoshop or Paint Shop Pro like LOT767-300ER said. These programs can also convert the file. I like Paint Shop Pro myself, but if you just want to convert and not edit go to http://www.download.com
and search for a free tool to do it. With an editing program you typically "cut" the part of the image you want from the rest and create a new. If it is a solid background you can just use a paint program to remove all of that color in the area you choose.