That rectangle you see is because the trasparent material applied arround the label is a different color than the transparency of the label. Make them the same and you shouldn't see the edges.
On the left is your model as you sent it. On the right is what happens after exploding the image so it is a material painted on the face. This is the same thing Box is talking about. It looks like you are being inconsistent about how you are bringing in the images you are using. Or trying to use.
