Ah, no sorry if I was vague. The texture is set to "texture" and the transparancy works. No blue areas. The render amount is set to 255 so the "solid parts" of the texture shows as well.
But the light that is cast on the texture from a light entity doesn't look right.
Imagine a long corridor with a fence that runs trough its longer axis. In one end there is a light so that area is well lit. The other end is completley dark. The walls, the celing and the floor are bright in one end and fades to black in the other end. The fence however, is fully lit all the way. So when you stand in the well lit end of the corridor it looks funny that the fence can be seen like in broad daylight all the way to the other end while the rest is fading to what seems like an infinity.
I'm at school right now, but when I get home I'll post a screenshot to explain