So, I answered by own question, So I thought I would post my findings.
Alpha channels are supported through the TextureManager, that actually wasn't my problem. I was also experimenting with the Compositor at the same time. I switched to using an roScreen instead, and everything lit up, and the Alpha channel is being observed. I should have been more specific in my first post.
I don't need to use a Compositor for what I am trying to do, and I have not really used them outside of toy POC's. I know some folks live and die by them on this forum, but let's not strike up that holy war. 🙂
So I have a couple more questions that it would be cool if someone had an answer, but it's not critical to what I am working on right now.
* Does the compositor have the ability to observe an Alpha Channel?
* In terms of the TextureManager, is Alpha just on by default? Is there a way to toggle it on /off?
* Does it really mater? If you disable Alpha on roScreen itself, then Alpha is not observed, So does that prevent the performance hit, because it is toggling the Channel off before it goes to do the actual draw?
Thanks,
Matt