Those box's are cause you have Anti-aliasing going on.
When you made your characters, you used Anti-alias on a white background yes? Well only the white color you picked will be transparent. all those extra variations of gray will not be.
If you want those smooth lines with out this issue. When you make your char set, add a new layer over the white background, then delete the white background. Draw your characters and save it as a PNG.
You don;t have to import it into the game, just save right into the characters folder. The transparency seen in the program will now also be in game. Tada no more white blocks.