I do some programming, yes.
PNG files are actually of the highest quality with alpha with nice compression. The issue I'm seeing is that FPSC uses pure black to be used as a pseudo-alpha channel based on RGB values. So anything in a .jpg that is pure black will become transparent. This is okay if you know this in advance, but not if you don't. To get around this, you'd have to resave the images with a shade higher than 0,0,0 or the black areas will be transparent.
Anyway, I still think that you should let the user worry about the conversion. For buttons, let them pick from .tga, .dds, .jpg and .png (.bmp if you're nice). And for backgrounds, let them pick from .tga, .dds, .png or .bmp**. This way, you don't have to do any conversion, just copy the source image file to the destination image file.
**JPG images in FPSC backgrounds get color distorted most of the time and render with splotchy colors. I think the reason for this is that no matter what format YOU want, FPSC converts it to .dds for gameplay.
~Dave
Phoenix Sentry Programmer