cloth sim on image as plane help

Hello. Im trying to animate a puddle of water in a still image. I have an ‘image as plane’ as my original still, and the water puddle area is another PNG ‘image as plane’ hovering over it… to which I sub divided, pinned vertex group and applied cloth sim and wind. First problem is in texture view, the PNG is not transparent in the alpha area (shows as white). I looked at many tuts but problem persists. Second problem is I have both planes as shadeless to be as bright as they can be, but I want to see ‘ripple water’ detail in the puddle. Please help. See file, or does anyone have a better way to do this?

Attachments

HouseFloodTest.blend (7.69 MB)

First problem is in texture view, the PNG is not transparent in the alpha area (shows as white)
For the material of the plane enable the Transparency tickbox, enable Z Transparency and set the alpha to zero. Then in the texture settings under ‘Image’ enable the ‘Use Alpha’ option and under the ‘Influence’ setting enable Alpha

Works great when I … “F12”, however Viewport shading selected to “Texture mode” still shows the alpha area as white.