How to make a nice overlay with variable transparency using WinForms?

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I'm looking for a way to make a WinForm transparent and allow to use semi-transparent images on it.

The common solutions are:

  • Changing the total opacity of the form and all of its content;
  • Make only a certain color fully transparent, while the rest will have to be fully opaque;
  • Use multiple forms to make only some controls transparent.

None of these ways allow to display images or controls which have variable per-pixel transparency value. And I'd like to achieve a cool interface like Steam does with its in-game overlay.

Is there maybe some video game technique that can be used to draw a nice overlay for the whole screen? It's okay if it will have to use 3D graphics drawing libraries and whatnot.

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