i don't mean to sound insulting at all, but if you are having a so hard time with this it just may not be your thing.
i mean K1ll's tutorial on the first page pretty much covers it in a nutshell, look it over carefully and pay attention to the tools and buttons used in the screenshots
for the record "White" (as in pure white, it must be pure white not one shade or hue difference) IS the transparent background. so for ur pink pixelation problem, just take the eraser and/or pencil or paint or whatever tool you choose and turn all the pink white. if you're working with a highly pixelated image like something that was saved in jpeg format this can be time consuming, but it will all pay off if you just take the time to clear the image you want from the stuff you don't. once your subject matter is isolated in this way all you do is choose the transparency option and then select and drag the intended top image over the intended background image