Here's some recent stuff I did:
http://cgfm2.emuviews.com/temp/bonk.pceThis shows how to do "true" transparency on the PCE using the "Jackie Chan" sprite priority trick. The transparent stars are sprites and while I didn't add any movement to the program, they can be freely positioned anywhere on the screen and the transparency effect will continue to work.
The trick works like this: The background image is a blue-tinted Bonk made of tiles, and the foreground is a normal colored Bonk made out of high priority sprites. The stars are low priority but placed first in the sprite list, ahead of the Bonk foreground sprites. This means that when the stars overlap Bonk, the Bonk sprites aren't shown and the blue-tinted background image is forced to the front. That's how the transparency on Bonk works.
The background is a gradient done by changing the color every scanline. The graphics data for the low priority star sprites is also a gradient and the colors for each line are changed as the sprites move vertically (though they don't move in this program).
The only catch there is that the sprites are 32x32, but only have 15 colors. So lines 0-14 are palette #0, lines 15-30 are palette #1, line 31 is palette #2, etc. You need 2 or 3 palettes per star shown, so there is an upper limit.
In terms of CPU power the only work you do during VBlank is to load a new animation frame for the rotating star, and update 31 sprite colors, per star, so the star gradient order matches the background gradient order. If the vertical position doesn't change you can skip the palette update.
Note: If using YAME crank up the CPU speed to make the gradient visible. Or if you want to see the effect without the gradient, use the lower CPU speeds.
Special thanks to Fragmare for converting and color-correcting the Bonk image!
http://cgfm2.emuviews.com/temp/SloMoCompoEntry.zipDesigned to make your ears and eyes bleed, just an April Fools joke. But sources are included!

Sit close to the TV and turn the sound up before you turn on your PC Engine!