I'm fairly sure you shouldn't be using transparency mode 1 since it will draw it first which means it gets blended with the backdrop (since that's the only thing there). I would have thought one of modes 4 or 6 should work.
Have a look for chafari's posts a few months back. I think he sorted this problem out - and there have been a few others since.
Edit Try this:
set display mode desktop width(), desktop height(), 32, 1
sync on : sync rate 60 : sync
autocam off
position camera 0, 0, -500
point camera 0, 0, 0
` make background object
make object plain 1, 2000, 2000
load object "leafy tree test.x", 100
position object 100, -500, 0, 0
set object transparency 100, 4
set object texture 100, 0, 0
TreeCount=100
do
if spacekey() and keyNow = 0
keyNow = 1
inc TreeCount
clone object TreeCount, 100
if object exist(TreeCount)
position object TreeCount, object position x(Treecount-1)+100, object position y(Treecount-1), object position z(Treecount-1)
endif
else
if spacekey() = 0 then keyNow = 0
endif
sync
LOOP
