The Knowledge Adventure Worlds Avatar Tool
...or KAvaT, for short. (like "caveat")
This is a program that automates the process of converting images into hologram textures.
It automatically handles scaling and properly formatting your image to get exactly the right quality you want. It even splices large textures (>256px in any direction) so they will appear the highest quality possible within the Worlds client, no additional tweaking necessary.
Simply put your frames into the executable and it will do the rest. Make sure you have COMPIMG.EXE in the same folder (all lowercase). This tool will overwrite any files that get in the way so you should set aside a dedicated folder for your work to take place.
Linux only at this time. Future versions will have QOL improvements and potentially a GUI.