you could also hack the VRayPlugins.xml file to modify this setting in 1.49.01... but that's a little dangerous BACK THE FILE UP, PRIOR TO MODIFICATION!!!
<parameter handler="default" label="Use color texture as transparency" listType="none" name="use_color_tex_alpha_as_transparency" type="bool">
<value>
false
</value>
<handlerinfo>
<tooltip>
Enable this if you wish to use the alpha from the color texture for transparency
</tooltip>
</handlerinfo>
</parameter>
just have to change the false to true
