Q: Currently I am working on a community download pack containg a large variety of foilage placeables (ferns, shrubs, weeds, flowers, small trees etc.). I am using alpha layers in my textures, and currently have tried dxt5 interpolated alpha (this is what format I use for my foilage in other engines such as UT2003/4) and also dxt1 with alpha, but I get no transparency in the toolset. My models and textures are showing up in the toolset just fine, but the engine seems to ignore the alpha on my diffuse, and uses the alpha on my normal for glossyness/shinyness to an extent. I verified this when I omitted the normal map. I have tried assigning the materials to the models in every way I can think of, even left off the normal map so I am at my wits end.

What dds format is used on textures with alpha for transparencies? (Exp: SpeedTree tex are using alpha transparency)

Is there some setting in the MDB file itself that tells the engine it has transparency, and if so it would be the next gap filled in the work of those who are making the MDB utilites that allow us to get our new models in the toolset if this information was made available?

If the setting for transparency in a texture of a model isn't in the MDB file, where is and what values need to be applied to get it working properly?

DXT5 is the recommended dds format for alpha-masked transparency textures, though DXT3 and DXT1,1-bit alpha also work. We use DXT5 because it yields cleaner masking and edge quality for things like plant fronds and grass. The mask goes in the alpha channel of the diffuse texture. Any model utilizing transparency needs to be flagged as such before it is exported. Information regarding the public release of our model exporter is not currently available, but we intend to make it available in the near future.

You can see a good example here: Click Here