Now that we have DX9 on our hands

[GSH]

Try v23 of bz2dxtgen for what I think is a fix for the 'black parts of opaque textures can turn transparent' issue. And other features.

-- GSH

[OvermindDL1]

Someone asked what shaders actually do, but no one has yet answered, thus, the simple answer:
Shaders are little microprograms that a program (like a game) uploads to a video card.  It does very high intensity and vastly faster mathematical work then a CPU can and basically do a couple of things.  Some shaders work on 3d geometry to morph it (generally making it higher quality by applying things like a normal map in some cases, although most normal map shaders alter the pixels directly, to a polygon mesh).  Other shaders convert the 3d information into a 2d representation that is displayed on your screen, giving it dynamically changing colors, bloom, other effects.  They can do vastly more then that, but those are the basics of what you would see. 
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[Zero Angel]

Do shaders work on a pixel level, polygon level or texture level? Or is it any of these? Does bloom, for example, adjust the color of objects on the inside of the world? or does it work like a photoshop filter, simply post processing the whole 2D image which is displayed on the screen? (this is what I mean by pixel level)

[OvermindDL1]

They can work on any and all.  They control, quite literally, all aspects of drawing to the screen.
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[TheJamsh]

Thanks OM.