Files format to import into Livetype from Photoshop?

So I have an image I want to use as a background in livetype. It is in photoshop but I can export it as almost any type of image, but livetype won't let me import it. How can I use this as a background?

Save it in Photoshop's own file format .PSD
Livetype can and does import .PSD files easily

I figured out I was importing it wrong! Thanks!

Also, I am making a DVD for someone and the last time I made one I made a photoshop of the menu with the correct button so when I brought it to Encore I could set up the menu links easily. In what order should I do it with the animation? Do I import the menu like I am doing from photoshop to livetype? Then when I finish editing in premiere pro or final cut express bring it into encore and touch up the link there? Will the animation still work?

Last thing are the adobe and mac programs compatible usually?