How can I make a picture transparent in Keynote

So I'm helping my kid with a school project with a simple Keynote presentation. I know how to make the whitespace around a shape in Powerpoint blend in with the background, but I can't figure out how to do the same in Keynote. It's a simple small square pic that he wants to use for a Wild West presentation. I've read where people have done some import/export of images into photoshop, but that's not an option for us. I've exported the imaga and saved as a .png and re-imported it, but still no-go. Can anyone help? It's a Mac, and shouldn't be this difficult. We've got Keynote '09. Yes...'09 on a MacPro running 10.6.8.