Observed on Mac OS X 10.6 and 10.8
Broken: 2.69.0 r60991 Also confirmed on latest unofficial build 2.69b53f310
Worked: never, as far as I know
**Short description of error**
In the Video Sequence Editor a clip with its blend mode set to Alpha Over cannot have its Opacity adjusted when over a transparent background. I observed this with PNG image sequences, but it may occur with other file types as well.
If a //solid// background image is added to a channel beneath the transparent clip the problem disappears.
This leads me to suspect that Alpha Over was coded only to account for transparency over solid - not transparency over tranparency.
This bug prevents image sequences with transparency from being composited correctly and in that regard is a workflow-stopper.
For example if a client wanted an animated logo fading in over a transparent background this bug would stop you from being able to produce it.
**Exact steps for others to reproduce the error**
1. Get a PNG with transparency. I am providing one below.
2. In the Video Sequence Editor timeline choose Add > Image > and add the PNG.
3. With the clip selected, under 'Edit Strip' change the Blend mode to 'Alpha Over'.
4. Lower the clip's Opacity slider and see no effect at all. Even with the slider at 0 the clip will still be fully visible.
Refreshing the Sequencer doesn't help. Neither does reloading the .blend.
A PNG with transparency for testing:
An example .blend (uses above .png file)