Yes you can use paint, i use it to make all of my banners. I love it too bits, gets the job done and does it good.
When saving a file you can use the drop down menu to change it to a jpeg file, so it saves it as a jpeg. Bmp's take to long to download, and if you were to change a 100Kb Bmp into a jpeg by just changing its file extension (.bmp, .jpeg) it will still have 100Kb, you must actually save it through the actual paint program.
I hope that made sense.
Alcar...