Now I feel really stupid. I haven't animated in a while and I forgot that animation shop has quirky ways of handling transparency... so instead of doing it before hand like I should have, Im going to have to figure out some sly tricky way to save me the trouble and do it later. I hope you guys dont mind the ugly background too much 'till then.
Discussion
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in order to do transparency, (i have animation shop 3 so i'm assuming it's the same) go to Animation > Replace Color, and then select the color you want to replace and replace with 'Transparent opacity'.
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