[This is preliminary documentation and subject to change.]
Alpha blending is used to display bitmaps that have transparent or semi-transparent pixels. In addition to a red, green, and blue color channel, each pixel in an alpha bitmap has a transparency component known as its alpha channel. The alpha channel typically contains as many bits as a color channel. For example, an 8-bit alpha channel can represent 256 levels of transparency, from 0 (the entire bitmap is transparent) to 255 (the entire bitmap is opaque).
Alpha blending mechanisms are invoked by calling AlphaBlend, which references the BLENDFUNCTION structure.