make a faded texture

i was wondering how or even if i can make a texture do this
http://blender.isoserv.com/uploads/faded.jpg
i am talking about that teal circle fading out. i guess i could refrase the question to : is there a way to make part of a texture transparent so part of the model is not shown

Add a texture and make it a blend. Play with the colorband as needed. Set the texture to effect the alpha in the Map To tab. Make sure ZTransp is turned on.

-Laurifer

That is what the “Blend” textures are for (Textures->texture type->Blend). Play around with those and you should achieve and effect very similar to that.