Tutorial follows, not sure who the original poster was as this is spread out among several forums, works just fine though and the converter has a few options to make sure your spray looks good once converted. 



Note: This is for bypassing a bug present in the Beta version, this will be probably useless when the final release is out.
Note2:THIS METHOD IS FOR PEOPLES WHO DO NOT HAVE ANOTHER STEAM GAME INSTALLED PLEASE READ THE THREAD AND STOP SPAMMING, we already know there is another method importing files from oldies but there is plainty of guys outta there with only TF2 in steam and that's stupid for us to download another 1GB game just to convert pictures.. understand ? THANKS

Here is a simple method wich I'm using to import my own sprays:

1) Download VTFedit here: http://nemesis.thewavelength.net/index.php?p=41
2) With VTFedit, Import your own .JPG,.BMP, etc... and convert it to a .VTF file (Valve Texture File)

3) Now place the .VTF file to this exact location (you'll probably have to create some folder manually but it shows exactly like this):

(your dir)\Steam\steamapps\(your username)\team fortress 2\tf\materials\VGUI\logos
4) To fixe the quickview appearing blank copy the same .VTF also here (you'll probably have to create the UI folder manually but it shows exactly like this):

(your dir)\Steam\steamapps\(your username)\team fortress 2\tf\materials\VGUI\logos\UI
5) Ingame, go to the options and click import the spray and browse for it in the \logos folder (not the UI folder!) and validate. (this will create a VMT file near your VTF)

To resume, your .VTF must reside in the last \logos and also \UI folder where you copied it manually, then don't forget to do the step 5), the spray now appear correctly in the list, I have tested to spray it ingame and it works fine.

Hope that helps some soldiers outta there, cheers!