I'm not sure either Gary, it's odd. To be honest I have never used SBX as anything but a source for imagery and an .inf with regard to photoreal, beyond that I've always just snatched the .bmp and .inf out of the work folder immediately after downloading, converted them to .tifs in PS (not geotifs of course), edited the .inf to reflect the changes, and then all further resampling was done by sending the .inf directly to resample.exe.
I just did a quick test, with PS CS2 I opened one of the SBX-generated .bmps and stripped away the alpha channel (which was all white). I then simply saved it, and on re-opening I see PS had added back the alpha channel except this time it was all black - possibly that might account for the "flooded airport" mentioned above, although I have no idea if Gimp handles alpha in the same manner upon save.
I then stripped the alpha channel again and this time did
Save as where PS gave me an option of 24 or 32 bit with 24 ticked by default. Of course this time the alpha channel was not reintroduced, and I then opened the test project back up in SBX and successfully compiled the photoreal. I didn't check it in the sim but I did drag it into TMFViewer and it appears to be a normal photoreal like any other I've done and did not have a water mask.
Next I opened the .bmp back up in PS added the alpha channel back and did a quick water mask on it, saved as 32 bit, and recompiled again from within SBX. No problems, and in checking the .bgl in TMFViewer it appears you can indeed include your water mask as a channel within a .bmp - you just don't have the option of a secondary alpha channel for the blend mask. .tifs rule for that reason

.
Nothing above was really unexpected, pretty much exactly what I thought would happen, but the other day I was playing with one and I can't remember the exact scenario but for some reason I wasn't able to get SBX to give me a compile option - it kept telling me that nothing was selected when clearly the .bmp was selected and I know I had it positioned correctly according to the accompanying .txt file SBX generates when it generates a map. Maybe that test sample of imagery was just too small or something, I'm not sure. That
was odd behavior and I probably should retest someday and see if I can figure out what the problem was. Zzzzzz... With any luck I'll die before I get around to it, lol.
Jim