A short walk-through of the alpha functions in Windows XP.
EditByBSEditor: Some of the few new APIs released were bundled in the msimg32 dll and were probably part of Internet Explorers effort to Paint pretty web pages. One of them is TransparentBlt which should have been added to Windows a long time ago. It simply does a standard blit but uses a colour-key to mask out all colour-key coloured Pixels.
AlphaBlend is where the fun starts. This Win2000 API allows you to blit your image with dynamic transparency. You can blit an image with 30% transparency to an existing device context and bLend the images. If you just alpha-blit an image to your device context, you will probably be disappointed. you can free download Alpha Play 1.0 now.