wtf, this is such a bullshit... I KNOW THAT IT IS POSSIBLE TO SET A TRANSPARENT COLOR TO A [censored] WINDOW AND MAKE IT TRANSPARENT ON THAT COLOR.
Yes that is possible, There is a DLL on MS.org which does it (mFUNC.dll), Though that isn't what you asked.
It is possible to specify a color value to be made transparent. However, that is only 1 color, And it affects the titlebar the window frame etc. It is not intended or suitable for this purpose. And, as you have already been told, It would only work on top level windows. You won't get the X-Chat type effect you're after. Hence I told you before it's not possible.
I don't make up my information, I get it from experience of working with transparency in windows.
I
think other operating systems like the Mac OSx have more sophisticated support for transparency, whereas windows only has crude support.
Layered Windows 
