You can convert alpha channel to mask using Create Mask By Alpha.vi
in vi.lib/picture/picture.llb
George Zou
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To create a semi-transparent image, you can break each pixel into its RGB values, average these values with the RGB values of what's supposed to be under it and then build the result back into the 32 bit numbers. I assume that for alpha transparency, you will need to do averaging which will take the alpha value into account. To get the RGB value, you can go over the image a loop and use the color to RGB VI, but I'm pretty sure using the Split number function on the 2D U32 array twice will also get you the correct values.
Only the 32 bit image has alpha channel. The other 3 bytes are Red, Green, and Blue.