Cutting ot circular pieces from a photo and inserting it into a circular frame

I will try and explain better. I am designing a front cover for a Xmas Magazine and want to put a White Xmas tree on the front. On this tree I want to insert Xmas baubles and into each one a circular photo of a member is inserted. All this will be printed on Red Card so the background is already established. This being the case my circular cutouts always show a white square behind the cirlce even though I choose a transparent background. Hope this make things a little clearer -I am still a novice at all this.

If you want to insert them with a clear background, try using different layers. Are you using photoshop? In that case you have your picture of the tree (background), and in a new window you have your picture to put in a bubble. You make your background transparant and add it to the pic. of the tree as a new layer. This is important! If you do this, the programm will only copy and paste the bubble, because the picture of the tree is now the background and your bubble had 'none' to start with. I hope that makes it more clear. Otherwise you might want to have a look at some PSP tutorials, I'm sure they can give you some great advice too. Thank you for explaining and the best of luck! Please let me know how it works out :)

Thanks a lot. I will give your suggestion a try and let you know how I get on. If you have an email address can you send it to brenda.earnshaw@btinternet.com so that I can contact you with the results of designing my Magazine Cover pictures.