Im not very farmilar with shader programming but the blue could be the same as the background color, try to chnage the color.
For the Z-Buffer sorting bug use this:

zWriteEnable = true;
alphaTestEnable = true;
alphaBlendEnable = false;

And remove BlendOpAlpha = ADD;

Last edited by Ch40zzC0d3r; 03/12/13 15:19.