*Solved - fixed it by changing texture resolution of image to POT values. Doesn't seem to calculate the edges properly. It adds alpha transparency where it should be solid texture.....
You're welcome. It's really nice software! Quick and simple for building game-assets - literally takes a few seconds. Great for low-poly pistol and rifle models - will also be great for low-poly buildings/shipping-crates/cars/vans/lorries etc.