Come on! Nobody? Does nobody have this problem?

i'm not exactly sure, looks like you just didnt select all of the open area
another thing could be that when you found it, it was a .jpg, which leaves horrible artifacts on some images

try just selecting the part you want, and copy it over to a new, completely transparent background

i don't use paint.net, so just a suggestion.

Thanks dude! That really helped!

Well. it is a sprite object, not a skinmesh or rigidbody so, IMHO, problem is not a mapping since there is nothing to map. Problem is in either dds file type or in the way 3DRad draws sprites on screen.
It is easy to reproduce the problem. Make, in your paint program, an empty file in size like 256x256 pixels (remember the multiply by 4 rule) or so. Make an filled rectangle and move it to the upper left corner so that edges get filled. Save it as dds and place it as sprite object in 3DRad. Pixels will get repeated on the right and down. Interestingly, if you place the rectangle on the right down corner, nothing of this happens.
And, yes, I've tried several different settings for dds file type.