Is there a way to change an object’s opacity in Python? Looks like a material thing, so I have to access an objects material in the BGE?
Yes. You can change an objects color [r, g, b, a] in python, see API: http://www.blender.org/documentation/blender_python_api_2_67b_release/bge.types.KX_GameObject.html?highlight=gameobject#bge.types.KX_GameObject
To use the object color enable it in the materials tab (default is disabled).
More advanced materials can also be made if you combine it with node materials using the object color as a material input channel :D. This way you can have 4 input parameters that can have all kind of effects depending on your node material setup…
Interesting. Thanks for sharing, I didn’t know that was possible.