Probably this is what you're looking for:
Originally Posted By: Manual
A logical consequence of translucent or alpha channel transparent objects is that you can see other objects through them. This sounds trivial, but means that transparent or translucent entities must be rendered after all opaque entities (see rendering), and must not write into the 3D card's Z buffer. Thus their depth-sorting is not pixel-accurate, but only object-accurate. They won't hide other polygons or other parts of the same object. This can cause visible sorting errors on the screen when triangles of transparent models intersect or overlap. The errors are normally hardly noticeable, but sometimes very obvious - expecially when the alpha channel is almost opaque.

You can read the full explanation here:
http://www.conitec.net/beta/wed_entities.htm#transparency