The halo effect actually something else - I just used the name because it was similar to what was happening in your pic.1. Whats Halo effect?
Basically, the halo effect occurs when you try to remove the background colour from some images, and replace it with transparency. If this is done improperly, there will be a few pixels on the outer edge that are partway between the correct border colour, and the background colour.
When this image is placed on a background of a different colour, you end up with an extra outline, that looks blocky, of the same colour as the original background.
For example, lets use the image below:
From left to right, these are the original, with background removed, on a white background, and on a black one. Note the ring ("halo") in the fourth image. (ideally, it would be completely black)
(It kinda figures that the board went donw just before I made this post. Good thing I saved it.)
