well since im so nice i just resized it for you and hosted it.
http://anzwers.org/trade/dlt/sonictag.html
so now to answer your question venture: i think what he did was make the tag on a very very big canvas, and then saved it as .jpg which turned the transparent part to white, and then it turned out into a big thing such as that..............and what i did to solve that prob was that i took it, and used the marquee tool and made a border around the image and copy and pasted it onto a smaller one and then i used the magic eraser and deleted the white part, but then i noticed that it took out a few parts of the white inside the tag as well, so i had to draw a border around the right side of it to keep that from happening again, so then i used the magic eraser again and deleted the white on the outside and, there you have it, if you have any more questions, just be sure to ask.