I think you should update to the latest 3d gamestudio version if you haven't already done this. (it's on the download part of the forum, check it out, it's at the top of this page.)

In case you did update already, you can find the material settings by going to edit -> manage skins -> skin settings.

The latest version has the material settings, unlike the ME D you seem to have atm. It also supports multiple skins, this is where you add 1 skin for the hair, a tga with alpha channel so it makes the hair transparent and one skin for the rest of the model. (for example). That should do the trick ...

Did you make sure you've unchecked the 'transparent' flag too by the way? A model half transparent sounds like the flag you can set in WED to me.

Hope this is of any help to you,

Cheers