I am trying to create an PNG image with a portion as transparent. The GIMP tool shows the background in the checkboard pattern where the image should be transparent. When I display the image as cursor over a colored background, it is not completely transparent. How can I fix this?
Your checker board has a tint so the background is definitely not transparent.
You can use the Pointer dialog to explore the image and check the RGB+A values and you will likely find that the A value is not 0 one what you think are transparent Pixels.