Using alph textures in materials question.

Im creating a boxcar for later export to a game and I want to add letting to the side. I created a png with alpha channel but when I apply the image to my material and render it im getting this weird haloish thing around the edges of the letters and I cant figure out why.

Does anybody have any suggestions?

Tor the texture with transparency, in the Texture / Image setting try enabling the Premultiply tickbox