Well, you perhaps have Directx7 SDK, so you should study the DDraw examples 1-4, 4 is the best. That is very clear example about it.
Basically, you just create a surface,Surfdesc and Rect for it and then blit it to backbuffer.

Yep,

Also Specify a color key for your bitmap
and when you blit to your buffer, your would incorporate your specified colorkey in your final parameter

How do you make a sprite with direct_Draw in vb.
thanx

Sorry my first reply was a tad vague

Specifying a colorkey will privide transparency in your background

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Erick