OK, here's what I got:
D3DTSS enumeration (containing default values for D3DTSS_* settings)
D3DTA enumeration
// where does the SRC color come from?
// why, the currently bound texture of course!
d3d->SetTextureStageState(0, D3DTSS_COLORARG1, D3DTA_TEXTURE);
// Default: D3DTA_TEXTURE (anyway. So this setting is redundant.)
THE BIG CHANGE COMES NEXT:
// let the alpha component be read from the
// diffuse color of the vertex..
d3d->SetTextureStageState(0, D3DTSS_ALPHAARG1, D3DTA_DIFFUSE);
// Default: D3DTA_TEXTURE (which would be "pull alpha from the texture")
// because my vertex declaration is set up to send 1 color, and
// D3DRS_DIFFUSEMATERIALSOURCE is set to D3DMCS_COLOR1, this means
// to use the vertex alpha i specify. i think.
The rest doesn't really change anything from the default values, but its here so everything can be seen:
// DEST where does the alpha value come from? also the
// diffuse component
d3d->SetTextureStageState(0, D3DTSS_ALPHAARG2, D3DTA_CURRENT);
// Default: D3DTA_CURRENT. I believe this means "the destination will
// be whatever the existing color in the framebuffer already is"
// setting up as is default,
d3d->SetTextureStageState(0, D3DTSS_COLORARG2, D3DTA_CURRENT);
// Default: D3DTA_CURRENT. No change.
I think that works.
Further to understanding: this link contains an old but very neat tool called MFCTex:
So its very easy to see the effect of what's going on when you use different args.
I realize this is not the cool way to do this anymore, and really the cool way has been for some time to write your own vertex and pixel shaders.