Transparent panels in .NET are not really transparent. Setting the background color to transparent causes the background of the panel to match that of the control it inhabits. This creates an issue when you have 2 panels in the same control because they wont appear as transparent if overlapped. This is indeed very weak.

To actually set the background of the control to true transparency, try overriding the CreateParams property and the OnPaintBackground method as follows:


protected override CreateParams CreateParams
{
get
{
CreateParams cp = base.CreateParams;
cp.ExStyle |= 0x20;
return cp;
}
}

protected override void OnPaintBackground(PaintEventArgs e)
{}

I had to do this to paint an overlay on a set of controls. In order to get a mouse to be able to access controls that are "through" this transparent portion, you will have to disable the transparent control.

Hope it helps!
James