Transparency in FPSC is no problem. It will support transparency on anything the engine supports as far as I have been able to ascertain. That includes segments, entities and decals.
I have had a couple of difficult images with decals.
Here are some tips that might help.
First of all your image must have a totally black or greyscale alpha channel.
Black (greyscale) the transparent colour must always be so. i.e. absolute 100% black for areas that are outside the boundary of a continuous tone image. For example in its simpliest form : you have a square image with black background - in the middle you have a white circle. If the black is perfectly so you should just see your white circle in game.
In your objects script file be sure to include the transparency info. i.e. transpqarency = 2 as well as making sure the transparency figure is set in the objects properties dialogue box in editor. If the figure 2 dont work correctly try another for the particular object 0,1,2,4 and see what you get - its worth experimenting anyway so you know how the numbers affect your images transparency and you will have learned something.
When testing if you get problems - make sure that every time you make adjustments you exit FPSC and restart the editor after deleting the offending objects .bin and possibly .dbo files. Be careful what you delete. A nusiance but sometimes necessary when problems occur so that FPSC updates your changes.
If you still get difficulty with transparency:
If you have problems with your alpha channel in your 24 bit image - try making or saving out the alpha channel of your image as an 8 bit greyscale image before pasting or importing it back to the alpha channel within your 24 bit image file - that fixes some probs. 24 bit black/greyscale created alpha channels can prove troublesome sometimes.
Try saving your image file with the alpha channel set as 1 bit, 8 bit, 24 bit and see if one of those fixes the problem.
Try using a different file format as different image progs, formats and game engines utilise output files with alpha channel in a different ways. Its not an absolute compatible world the world of imaging.
Try using tga, dds or png and yes we know FPSC converts tga to dds - dont matter try anyway.
Personally I use 24 bit dds files for all images I make - when alpha channel is required then I use the mentioned mentioned previously above and separate or create an alpha channel saving it as 8 bit greyscale - then open it, copy it and paste it to the 24 bit image alpha channel - save as .dds - thats it and it works in almost every instance.
Decals are the hardest to get transparency on when you need to apply a level of transparency to the whole of the image and not just a part of it. i.e. if you want water to be transparent or a complex face - you may want a graduated level of transparency over the whole area - thats when it becomes the hardest for decal success as you are mixing a 24 bit graduated tone image with a greyscale graduated tone alpha channel. I not failed yet though had some difficult ones.
If all else fails as I have said before - if its appropriate for your object - you may want to try creating another entity, such as in the case of water and use a wall type entity using your 24 bit texture on it and making it either invisible or transparent and passable (coloff) before attaching/applying a transparent decal to it. Of course you would need to make sure again that the entity also has its transparency value set in editor and script.
Hope that helps though it sounds complex its not. Time consuming it may be until you get a personal solution and thereafter its plain sailing. One step at a time does the job.