The Transparency Palette allows you to add or adjust transparency of solid colors. It is accessed by selecting Set Transparency from a Paint Swatch Popup Menu of the Line & Fill Palette.
To change the transparency of a gradient you must access the Gradient Palette by choosing "New Gradient" from the swatch Popup Menu. Each color of the gradient has an independent transparency and must be adjusted separately.
The Transparency Slider adjusts the transparency of a color from fully transparent when all the way to the left, to fully opaque with the slider all the way to the right.
The numerical value range of the slider depends on the active color space. In RGB or Web mode, the range is from 0 (transparent) to 255 (opaque). In CMYK mode the range is from 0 (transparent) to 100 (opaque).
As colors become more transparent, their representation in Paint Swatches will reveal a gray and white checkerboard pattern behind them.
The Done button closes the Transparency Palette. Whatever setting changes you have made in the palette are retained.
The Cancel button closes the Transparency Palette and reverts the calling swatch to its previous settings, ignoring any changes you may have made in the palette.
For more about working with transparency, see Working with Paints.