The only method I know is using Paint Shop Pro 8, and it basically comes down to creating a layer with 50% transparency and pasting the transparent element in it.
However, depending on the way the game handles its transparency, the result might look more or less like the real thing.
For example, right now, Aria Of Sorrow is killing me because I'm totally unable to reproduce its effects. I've been mostly cheating my way through so far since most of it consists of a single colour for the transparent medium (like water), so I just had to capture the background with the underwater palette and paste that where needed, but now I'm in a part with lots of animated waterfalls (8 cycling colours!) over very non-repeating backgrounds. Needless to say, I'm barely averaging a room like that a night, if I'm lucky. GBA-style Alpha Blending sucks.
I would suggest asking Revned, since whatever method he used to reproduce the waterfall in Symphony Of The Night gave a result almost indistinguishable from the real thing.
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Current projects: Bucky O'Hare (NES), Metal Storm (NES), Clock Tower (SNES), Ristar-The Shooting Star (Gen), Sonic The Hedgehog (Gen), Sonic CD (Sega CD), Mega Man Zero (GBA), Battletoads (NES)