simply use a png map with a transparent background in the in the diffuse slot. make sure to tick the "use texture transparency" checkbox. you can use the same diffuse png map to get bump/displacement/reflection/whatever map just with a little photoshop.. hope this can help..

Models can be uploaded to GE several ways. Some bigger organizations with many models use this way and you cannot obtain these models (unless you find out who made them and get them from them) Then there is building maker - where available at least - and unless a modeller decides to save his model to the 3D Warehouse, too, you cannot access these models. Then there is the 3D Warehouse where a modeller may decide notto allow folks o download his models and some other modellers decide to allow downloads - now this is the only case when you can access and download those "Nearby models".

Hi Peter. There's always some little tidbit. I always work with a full white background for the projects I send to LO so I don't run into the thing of the background not being transparent.