I got this to work

Code:
var video_mode = 7;
var fade_speed = 10;

bmap background = "background.bmp";//back panel
bmap background1 = "background1.bmp";//above panel
bmap start_norm = "start_norm.bmp";
bmap start_roll = "start_roll.bmp";
bmap mouse = "mouse.bmp";//mouse picture

function main()
{
	wait (3);
	mouse_map = mouse;
	mouse_mode = 3;
	while(1)
	{
		mouse_pos.x = pointer.x;
		mouse_pos.y = pointer.y;
		wait(1);
	}
}

panel background_1//starting background picture
{
	bmap = background;
	layer = 1;
	button ( 300, 300, start_roll, start_norm, start_roll, fadein,NULL,NULL);
	flags = VISIBLE;
}

panel background_2
{
	bmap = background1;
	layer = 2;
	button ( 300, 200, start_roll, start_norm, start_roll, fadeout,NULL,NULL);
	alpha = 0;//starts at 0 alpha
	flags = TRANSLUCENT;//translucent allows the alpha to work
}

function fadein
{
	background_2.visible = ON;
	while ( background_2.alpha < 100)
	{
		background_2.alpha += 10*time;//if alpha is not at 100 increase it
		wait(1);
	}
}

function fadeout
{
	while ( background_2.alpha > 0)
	{
		background_2.alpha -= 10*time;//if alpha is not 0 decrease it
		wait(1);
	}
	background_2.visible = OFF;//make sure to turn off the top panel otherwise the
										//bottom panels button wont work
}


Hope this helps.