I am having a problem with a material/texture not showing up transparent as it should in blender 2.69. The material is from a tga file. I have a video showing the problem here where the hair should be mostly transparent, but instead shows the default model color of gray.
It looks like it should when I right click on it, but when I select a different part of the model, it show incorrectly again. I followed the steps in this tutorial and it got it so that it works when it is highlighted at least which is a nice, but it is still not working as can be seen when some other part is selected.
The blend file can be found here. Thank you in advance for any help that can be offered.