DDS transparency is set by the image's alpha channel. If an area in the alpha channel is black, that area is transparent regardless of the color in other layers. Greys in the alpha channel control transparency percentages. White would be solid.
I'm positive the image reference was correct since I was using an image style that works fine for other images.
What the various color settings are supposed to (and usually do) do is scale the red, green, and blue values for the source image.
Say you're source image has a yellow pixel in it that's 888800. That's 50% Red, 50% Green, 0% Blue. Setting the background color in UIBuilder to 50% grey (888888) cuts the source image color values in half. Your yellow becomes 444400, that's 25% Red, 25% Green, 0% Blue. Since the source image doesn't have any blue in it, no amount of blue coloring in UIBuilder will change how the image looks.
For objects that aren't containers, there doesn't appear to be any real diff between foreground and background color. Foreground color is just another color adjustment to the source image.
However, there is a big difference for containers. Background color only affects the object its applied to. Foreground color affects every object within the object its applied to. Slap a red foreground color on a page and everything inside the page goes red.
At any rate, it looks as though most of the scrollpage highlighters are hard coded to ignore most of our settings. In the Market window, the highlighter appears to have a fixed 50% opacity and ignores image style info. Similar issues with Store, Merchant, Tradeskills, prety much anywhere an image is used as a highlighter in a row template.
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