Per Pixel Alpha Blend

#ifndef WINVER
#	define WINVER 0x0502
#endif
#ifndef _WIN32_WINNT
#	define _WIN32_WINNT 0x0502
#endif
#ifndef _WIN32_WINDOWS
#	define _WIN32_WINDOWS 0x0410
#endif
#ifndef _WIN32_IE
#	define _WIN32_IE 0x0600
#endif
#include <windows.h>
#include "path_to_CxImage_library/ximage.h"

#define MAIN_CLASS_NAME L"AlphaBlendingWindowClass"

HWND mainWindow;
CxImage image;

LRESULT CALLBACK WindowProcMain(HWND hwnd, UINT uMsg, WPARAM wParam, 
								LPARAM lParam)
{
	switch ( uMsg )
	{
	case WM_PAINT:
		{
			PAINTSTRUCT ps;
			HDC hdc = BeginPaint(hwnd, &ps);
			image.Draw(hdc, 0, 0, 200, 200, NULL, true);
			EndPaint(hwnd, &ps);
		} break;
	case WM_LBUTTONDOWN:
	case WM_DESTROY:
		PostQuitMessage(0);
		break;
	}
	return DefWindowProc(hwnd, uMsg, wParam, lParam);
}

void Update() {
	POINT position = {100,100};
	SIZE size = {200, 200};
	POINT src = {0, 0};

	HDC screenDC = GetDC(NULL);
	HDC memDC = CreateCompatibleDC(NULL);
	UINT32 *data = new UINT32[size.cx*size.cy];
	ZeroMemory(data, sizeof(UINT32)*size.cx*size.cy);
	
	HBITMAP newBitmap = CreateBitmap(size.cx, size.cy, 1, 32, data);
	HBITMAP oldBitmap = (HBITMAP)SelectObject(memDC, newBitmap);
	image.Draw(memDC, 0, 0, 200, 200, NULL, true);
		
	BLENDFUNCTION bf = {AC_SRC_OVER, 0, 255, AC_SRC_ALPHA};

	if (!UpdateLayeredWindow(mainWindow, screenDC, &position, &size, memDC, &src, 0, &bf, ULW_ALPHA)) {
		MessageBox(NULL, L"Window wasn't updated!", L"Error", MB_OK | MB_ICONERROR);
	}
		
	delete[] data;
	SelectObject(memDC, oldBitmap);
	DeleteObject(newBitmap);
	DeleteDC(memDC);
	ReleaseDC(NULL, screenDC);
}


BOOL InitApp(HINSTANCE instance) {
	WNDCLASSEX wc;
	wc.cbSize = sizeof(WNDCLASSEX);
	wc.cbClsExtra = 0;
	wc.cbWndExtra = 0;
	wc.hbrBackground = (HBRUSH)(COLOR_WINDOW + 1);
	wc.hCursor = LoadCursor(NULL, IDC_ARROW);
	wc.hIcon = LoadIcon(NULL, IDI_APPLICATION);
	wc.hIconSm = LoadIcon(NULL, IDI_APPLICATION);
	wc.hInstance = instance;
	wc.lpfnWndProc = WindowProcMain;
	wc.lpszClassName = MAIN_CLASS_NAME;
	wc.lpszMenuName = NULL;
	wc.style = CS_HREDRAW | CS_VREDRAW;
	if ( !RegisterClassEx(&wc) )
		return FALSE;

	mainWindow = CreateWindowEx(WS_EX_LAYERED, MAIN_CLASS_NAME, L"AlphaBlendedWindow",
		WS_VISIBLE | WS_POPUP, 100, 100, 200, 200, NULL, NULL, instance, NULL);
	
	if ( mainWindow == NULL ) {
		MessageBox(NULL, L"Cannot create window!", L"Error", MB_OK | MB_ICONERROR);
		return FALSE;
	}
	
	if (!image.Load(L"../debug/image.png")) {
		MessageBox(NULL, L"Cannot load image!", L"Error", MB_OK | MB_ICONERROR);
	}
	Update();

	return TRUE;
}

int WINAPI WinMain(HINSTANCE hInstance, HINSTANCE hPrevInst, LPSTR lpCmdLine,
				   int nShow) {
	MSG msg;
	InitApp(hInstance);
	while ( GetMessage(&msg, NULL, 0, 0) ) {
		TranslateMessage(&msg);
		DispatchMessage(&msg);
	}
	return 0;
}

</windows.h>