I have always used Alpha to make windows and command-prompts transparent. It’s great; it lets you choose a chroma-key (the color to be replaced with the background), as well as some effects to apply to the transparent image coming through (eg, reduce color or adjust brightness).
However in Windows 7, there are a couple of things that you need to look out for (it works seamlessly in XP).
- You need to make sure that your graphics-card drivers are installed and that your card has an overlay surface (ie, hardware accleration).
- You need to disable the Aero interface because by default, it occupies (ie, hogs) the overlay surface, preventing other programs from use the hardware-acceleration functions in normal mode.
- You need to manually set the wallpaper because he has not updated it to support the new wallpaper location/filename.