Hi, I am looking for people's opinions on what tool/editor is best suited for created high quality 2D RPG style maps. Something that can seam together transparent images, create smooth transitions between tiles like grass, dirt, sand, create roads. The idea would be to "paint" the terrain and save it out as one big image that my game would load and populate with objects that move around. Thanks in advanced.
You could always write your own Map Editor, and just draw out all the tiles you want to use in any image editor like Pain/Photoshop/Gimp. Writing your own takes a little bit of time, but it would give you a better idea of how handling maps for 2D games works and the different concept you could use.
I definitely wouldn't recommend loading one giant image for your map though, remember with tiled maps you can create entire worlds from just a handful of images. It takes more memory to load a really big image, than a small handful of 32x32 tiles. Servant of the Lord has a pretty good explanation of how to implement tiled maps for your game here. Writing a map editor would be the same concept, but instead of loading the map data from a file you make in a text editor, you would save out the map data to a file depending how where the tiles are that you placed. Let me know if you have any more specific questions on how to do this if you're interested, it's actually really simple pretty efficient. I did this recently for my game, here is a screenshot of it that shows what tiled maps can produce.
Taking the tiled map approach as opposed to the "saving one big image" approach, has man more advantages than just taking up less memory. With the data for each tile that your custom world editor (that you could easily write), by creating a Tile class you can store more information than just the tile's image. You can store the location on the map, the type of tile it is, weather or not it's a walkable tile (or drivable if your doing roads and such), etc. That makes collision detection a lot easier in the long run vs having to go in and hard code all the areas that you can't walk/drive.
You could easily implement a basic tile blending algorithm to make the transitions between your tiles smooth if that's what you're looking for. This is what the above screenshot would look like with an image blending algorithm for the tiles.
I understand this can be a little confusing at first, but I promise it's really not a difficult concept to implement. Let me know if you need any more specific help or have any questions!
I don't know if its exactly what you're after but there's a pretty good 2D map editor called "Tiled". If you visit http://www.mapeditor.org you can download the executables or source code. It runs on Windows and Mac OSX.