Create your texture that you want to be transparent, usually a solid but can be a pattern. In your graphics program set the opacity to the desired transparency, save as png. Use the buildDXT in SimPE using DXT3 to replace the TXTR.
In the Resource Tree, select Material Definition(TXMT) that matches your TXTR that is to be transparent. In the Resource List, select the mesh subset.
Select the Categorized Properties tab.
Transparency vs Cutout. hrmmm… So item 1 is for alpha blending (transparency) but setting 2 & 3 is for alpha cut out without blending. Fixes the weird disappearing when looking at different angles.
Select stdAlphaBlendMode. Set to blend
Select stdMatAlphaTestEnabled. Set to 1
Select stdMatAlphaRefValu Set to 255
Misc (need more research to verify)
.1 – Dull
1 – Reflective
.1 – Little shine
.9 – More shine
**There is much, much more to this and I will add bits and pieces as I figure them out, this is only specific things I have worked with. In the meantime there is a series of tutorials by pixelhate at MTS that are very in-depth.