Using group transparency
Group transparency (sometimes known as knockout groups) lets you apply transparency to a group of objects, in addition to or instead of transparencies on the individual objects.
Ungrouped objects
These two objects are not grouped, and both have a transparency level of 50%. Thus you can see one object through the other.
Grouped objects
These two objects are grouped, and then 50% transparency is applied to the group. As the transparency is applied to the group as a whole, and not the individual items, you cannot see one object underneath the other .Note: if you ungroup the objects, the group transparency will be removed.
Mixed transparencies
You can combine the methods above to create mixed transparencies. For example you could set an object to 50% transparency, then group it and apply a transparency to the group as well. You are also able to apply a transparency to a group first, and then later apply attributes to individual objects within a group. Just hold down CTRL as you drag-and-drop the attribute. See sellecting objects inside objects.
Group transparency
on blends
When adding a transparency to a blend between objects, the transparency will be applied to the blend as a whole.
If you want the transparency to be applied to each individual step of the blend, first make the objects you are going to use in your blend transparent.