I can't find any info on the forums or in the docs on this, so here goes:

I have some particles used for a waterfall, and then a bunch of trees in my level that are billboards, but the particles draw on top of any object that has an alpha channel, so that even if the waterfall and particles are behind the trees, they draw on top.

Is there any way to get the particles to draw behind meshes with an alpha channel?

Any help on this issue or things to try would be greatly appreciated.....Thanks

Particles are drawn after all objects. So they are sorted correctly in relation to nontransparent objects, but above all transparent objects. There is no easy way to prevent this. We can not let the engine sort particles because they are too many. I had an idea for a trick to better sort particles, but it's not implemented yet.

You recently added the particle.material to the PARTICLE struct. I know that this material slot is for assigning materials to decals, but I think it could be a good idea to make it also possible to assign materials to normal particles.

Of course it won't make sense to give an effect to a great amount of particles, but it could be a possibility to have a solution for special effects eg. when there are only a few particles that need correct alpha sorting; this should be possible via ffp effects. Such effects could be achieved by using Entities (sprites) as well, but I think it would be faster and more simple to use particles, as one hasn't to care about movement or collision detection when using particles and the particles don't use geometrie which should give an advantage compared with sprites, too.