How to tell: You are trying to use the eraser to remove all color but instead of a transparent area appearing it turns into the background color (usually white).

How to fix: Check the active layer in the Layers Dialog: right click on it to open a menu and see if Add Alpha Channel is enabled. If it is, then your layer has no alpha channel: click that menu item to add an alpha channel. With that fixed, you will be able to erase to transparency.