Hoffa: I tried to load the item, and it gave me the error "Editor can only read RGB or RGBA textures". I've had this error before, to fix it you just have to convert your PNG to a 32 bit depth. My way of doing this is to open the image in Paint.NET (
http://www.getpaint.net/), go to Save As, save over your PNG image, and choose 32 bit depth. I attached the fixed 32-bit sprite, so see if it works. If not, I'm afraid it might have something to do with the editor version you are using.
shiftyBOT: The setup.exe doesn't need to be in your Hammerwatch folder, but I figured it wouldn't let you use the installer on Linux. I have attached a zip containing the application exe itself, let me know if it works for you.
Also, I just updated Hammersprite to version 1.0.0.2. Only a couple changes:
Changelog:
Added pixel border around image boundaries so you don't accidentally drag outside
Added "Auto-Fit" option. When enabled, it automatically shrinks rectangle borders based on transparency (only when dragging new rectangles)
Fixed crash when you resize a rectangle negatively