If you use visual fx 32 you can use a black and white image - you dont need alpha channels or you dont need to store the alpha in the file.Originally Posted by RGMdddd
In this method - the area really does have to be transparent - with no image data there - you have to save your file as a tiff with transparency to make this happen
You have more flexibilty with image file format if you set the areas you want to be transparent to white.
But Using alpha will work as well.
If you need to display an image with alpha - and you need to see what the alpha channel is doing use colour fx 40 thru 47 - these are basically debugging fx for files which are supposed to be transparent or use alpha channels - they dont have much use apart from that.