Thanks for your response! Unfortunately, GIF transparency doesn't work well for smooth edges and shadows because it's binary. Read the section titled
Binary Transparency: the Scourge of GIF in the link to see why GIF can't be used for professional looking
compositing.
One of PNG's advantages over GIF is real alpha channel transparency. While Xara 3D outputs nice alpha transparency to PNG's, it doesn't do animated PNG's. Clearly it calculates alpha transparency, but I haven't found any way to get it out in an animated or video format.
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