spydrwebb; I just tried it with your logo above and it worked. I'm kinda all thumbs in PSP so I could not quit duplicate the same layer properties as outlined in the posted PSD tutorial but it's close.
I've zipped three different versions for you; one greyscale semi-transparent, one full color, and one full color semi-transparent.
I'm not sure why yours is turning solid unless perhaps your trying to collapse the layers before saving....?
Here's your logo:
http://home.earhtlink.net/~igohigh4/genslogo.zip