As a matter of fact, it will always be an unsharp glow surronding
the icon after sharpning and decreasing the icons color to 256 colors.
If you want to view the icon without a transparent background, then go
to Colors-->View Palette Transparency. Below, you will see the unsharp
glow on both the icon and transparent background.
A good way to remove the glow (at least for me), is to use the
Magic Wand tool. Select the area where the glow is, and hit the
Delete button. Do this until the glows are completly removed. This
is how the icon will look like after the glows are being removed. Viewed
in both transparent and icon background.
Now, all you have to do left, is to save the icon. Remember to
save the icon as "CompuServe Graphics Interchange (*.gif).
Now, save the icon and it's ready to be submitted! If you aren't
sure wheter the icon is ready to be submitted or not, you may go
ahead and ask in the 'Is this icon ready to submit?' thread.