Transparency Alpha of 0.001 is not see through at all, why?

Please see this screenshot:

The “clouds” in this screenshot have an alpha of 0.001 but are all sorts of screwed. The moon and moonshine behind them is not coming through correctly well, the moon is but the moon shine is actually originating from in FRONT of the moon object. Theres also stars in the scene but its blanking those out completely, additionally, towards the horizon the clouds turn a very ugly grey colour.

Why are these things happening?

Also the texture settings for the sky are on the right, as per the “preview” it should be practically invisible, but isnt.

Its not easy to see in the image. I can’t see what is what. The sky texture is not a world texture? On the right is a object material? what is the thing that looks like a E?

Under Shadow, do you have Receive Transparent checked? Try turning it on. I don’t know if it’ll help, but it’s worth trying.

As Kazinger said, it’s a bit difficult to understand what’s going on. Could you upload/attach your .blend file?

Sorry! Just realised in the intervening time i accidentally saved over that file with a version that didnt have the object in. I’ll try to recreate it…