The conclusion.
Step 09:
Place the character you are going to use on the map and point to the mouse cursor to it and click on the right mouse button.
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Step 10:
This brings up characters property list. Notice the start script which defaults to "appear.fpi". Point to it and click the left mouse button.
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Step 11:
You will see a square box with three dots. Click on it.
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Step 12:
This brings up the "Select file" dialog box. The default is in the "scriptbank" folder. However you want the "user" folder, so point to it and double click to access this folder.
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Step 13:
Now, locate the file you saved as "ghost.fpi" and point the mouse cursor at it and double click the left mouse button to select it.
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Step 14:
This will close the dialog box. Now point to the "Apply Changes" button and click the left mouse buttone
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Step 15:
Test the game.
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A couple of things to note.
1) Some characters do not do real well at transparency. However, changing the alphafade factor to a lower value might help plus putting the character in a room and lowering the ambience (that's a whole 'nuther story) can help. The fantasy characters do well as can be seen in a previous post.
2) The kicker is that if this does not work, then your graphics card does not support shaders and there is nothing you can do about it except to upgrade the card. If you give a game to a friend that does not have shaders, he might not even be able to run the game.
I have a sneaky suspicion that your card may not support shaders or you did not turn them on in the preferences. Even if this does not help, I am sure that others who are interested in making ghostly characters will benefit from this.