SprControl:TinyExample.bb

Could someone make a version of that tiny_example.bb that comes with Sprite Control library, but that actually demonstrates alpha transparancy which is the purpose of using sprites for 2d graphics?

This should work.
You need an image with the alpha stored (such as a TGA image).

; Sprite Control - Loading/Displaying Alpha'd images

Include "include\Sprite Control.bb"
SpriteGraphics3D 640,480

tex=LoadTexture("gfx\alpha test.tga",2) ; <- 2 = ALPHA
tw=TextureWidth(tex) : th=TextureHeight(tex)
sprite=CreateImage3D(tw,th)
EntityTexture sprite,tex

DrawImage3D sprite,120,80
RenderWorld
Text 05,10,"Sprite Control - Alpha'd image"
Flip : WaitKey
EndGraphics3D
End