
Below is a translucent 24 bit PNG made in Photoshop 6.0.1. Simply make a graphic in PS with the desired translucence and Save for Web as PNG. One way to obtain translucence is by using Advanced Blending in Layer Styles and lowering the fill opacity. The same result could be gotten by lowering the layer opacity. The circular frame was made on another layer.
BUT, the most popular browser, Internet Explorer doesn't display translucent PNGs properly. Hissss! What to do?

SOLUTION: make a translucent GIF! What?! NO such thing you say? Well, true, but there's a workaround (see example below):

First, make sure your shadow or whatever you want to be "translucent" is on its own layer.On another layer (or on an alpha channel), make a "checkerboard" of one pixel black and white "squares".
This can be done in Photoshop by making a pattern fill, or by using the Sketch>Halftone Pattern filter, Ditherbox...whatever. The effect is kind of like looking through a screen door.
You may download this ready made pattern if you wish.
Now Ctrl-click (Command-click on Mac) on any of the RGB channels. You will get a selection. You can use this selection to fill with color on another layer or use it to erase out or mask the portion of a graphic you want to be translucent. The result should be a checkerboard pattern of alternating transparent square "holes" in your graphic. Stir slowly and Save for Web. It looks a lot like true translucency, no?

You can come close to fading the image into the web background, as above by using the dominent background color in your graphic. If your background is too complicated it won't work. Here's a hint: tile your background pattern into a layer behind the image so you can adjust Hue & Saturation or other settings to get the desired effect. Of course you should turn off visibility on that layer before saving. You can do glow effects this way also:
This can be a bit tricky. Make the glow on its own layer.Try to get the background color along the outer fringe pixels. One way is to make a selection of the type and expand the selection about halfway through the glow. Feather it a pixel and with Transparency locked fill the outer edge of the glow with the background color. A good bit of trial and error may be required to get it right.
You don't need to stick to a checkerboard pattern. The examples below were made by making various black to white gradients, converting to Bitmap mode and choosing Halftone Pattern. Many more ways of doing this are possible.



