Thanks for the wave of replies grin

I managed to add transparency, by changing:
Code:
alphablendenable=false;
   	 srcblend=zero;
		 zWriteEnable = true;
       alphaTestEnable = true;

To this:
Code:
AlphaBlendEnable = TRUE;
        DestBlend = INVSRCALPHA;
        SrcBlend = SRCALPHA;
		 zWriteEnable = true;
       alphaTestEnable = true;

And adding this to the pass:
Code:
color.a = fAlpha;
    gloss.a = fAlpha;

Below float4 color and float4 gloss...

In case anyone needs it.

At alpha 1 the model is still visible, more like a faint shadow, but I don't know how to hide the remaining texture. It works for me in this state.

Extensive Multiplayer tutorial:
http://mesetts.com/index.php?page=201