I'm uploading a set of changes to the XEmacs 21.5 Mercurial repository right now. These changes implement a new face property named "background-placement" which makes an XEmacs frame "slide" over a face's background pixmap when the property is set to 'absolute.

If you do this on the default face, then you can achieve some sort of pseudo-translucency, for example by using the same (or a darkened version of) the root window's background pixmap.

Here are a couple of screenshots that illustrate this.