Yeah, I hit this one when creating my Galaxy game. You have to edit the configedit.xml file to fix this.

Near the top of the XML file, edit the line that says

<ConfigurationFile Mode="ADVANCED" Version = "3">

to

<ConfigurationFile Mode="ADVANCED" Version = "2">

Notice the "2".

Also, it should be noted that Wizz.it does not support the automatic <UpperLeftTransparency> feature as used by PENG (yes, it has that option in the software, but when it writes the file it picks a specific color with <TransparentColorIndex>, so if any of the images in the file you're trying to convert use an auto transparancy you will need to manually fix them).