i got good news, bad news and then good news again...
well good news, i believe i got true alpha blending to work. although by looking at the attached screen shot you will see i am currently have another problem, although the other good news is...hey look at that screen shot!!! i just finished programming the ability to take screen shots! currently it only saves them as bmp's so i had to manually convert it to jpg, but i thought it was a good start...
screen.jpg