A while ago I saw a instructable that was for making a lightsaber blade affect for free. The instructable called for a program called LSmaker. I do not know much about the program but I know of a program that can do a more professional job. It's been a while since I have used this method and so this instructable is mostly for me so I can look at it if I forget a step.
The program is called Gimp. It is a Photo Shop like, open source program. If you do not have this program yet then you can install it for free at http://www.gimp.org/downloads/. This program can do almost anything that Photo Shop can but it is not as user friendly so you need things like this to show you how to use it.