Anti-aliasing is basically the smooth edges that are created in a picture when you look at it on the computer. It's useful for photographs to eliminate choppy edges. For our purposes, your video card doesn't have anything to do with this.
That being said, it's a BAD thing for creating a the bmp for a map.
Compare the below side by side "islands" You'll notice that the left side is smooth, which actually looks better than the one on the right.
Here's a close up. You can see that by using colors that are "close" you can blend the colors of the item and it's background to create a much better looking picture.
The bad thing about all this is that those colors that make up the blend are not colors that Dragon can use when you convert the map. Having anti-aliasing on when you paint will create these extra colors that Dragon can't use, resulting in a messed up map0, which, of course you don't want.
The easiest way to prevent anti-aliasing is to use the "pencil" tool in Photoshop (I'm sure Paintshop Pro has something similar). Additionally, the Magic Wand, Marquee, and Lasso tools have an option in the toolbar for turning it on and off. Make sure the checkbox is de-selected to turn it off. In older versions of Photoshop, the option is in the Info Window.
-Ryandor