I believe you have to make the picture transparent from Adobe Illustrator or some other graphics editor. I don't believe transparency is set using the Description.ext file.
As I am not familiar with Illustrator, I don't know the exact method of setting transparency. Usually you must select the portion of the picture you want transparent and either delete it or set that color as a transparent color. Check the help wizard in Adobe Illustrator to find the exact method.
Also, certain file types can't recognize transparent textures. Among them is the .jpg. So if your file is a .jpg, you will have to save it as a .tga file, then, using Texview, save the .tga as a .paa file.