0xtob> It should work, however you must activate blending. The DS will only blend images by "layers" (formerly called groups), that is if you put all your images on layer 0, they'll never blend. To blend an image, you must change its group with ulSetAlpha. Example:
//Group 0, no blending
ulSetAlpha(UL_FX_DEFAULT, 0, 0);
[Draw our usual images]
//Group 1, alpha = 31 (fully opaque)
ulSetAlpha(UL_FX_ALPHA, 31, 1);
//This image can have an alpha channel (or if you set alpha to another value, it will be semi transparent). It will blend with polygons of any group other than 1.
ulDrawImage(yourTransparentImage);The group can be between 0 and 63.