http://goo.gl/hBFSj0 (http://goo.gl/hBFSj0)
How's the waterfall and seeing part of your character behind it work? Whatever it is, it looks nice.... in person anyway (the video looks pretty bleh).
Dithering?
Necro's link goes to the 46 minute, 12 second mark. My internet connection at the office is awful so the video quality is too low to tell what's happening there. :(
The video is dark and blurry, but it's the only one I could find that shows the waterfall; I'll try to get some screen shots tonight. The waterfall looks solid to me (not a checkerboard mesh like the hidden passages in Xanadu), and it's not flicker transparency.
The shortened goo.gl link was to prevent the video from being embedded, as the embedded video didn't use the time code.
I got pretty confused around the 15-minute mark (https://youtu.be/MD5K4kZtYGI?t=15m12s) when some out of place music kicked in....
Think this was played on an emulator?
Some speed run tas crap, I guess.
The effect is BG masking via sprite priority logic. You put a low priority "layering" sprite behind the BG layer, but this sprite is a higher priority than the 'object' it is masking/clipping. Usually, the 'masking' sprite is of two colors; one normal color and one 'transparency color" (color #0 of every sprite). The effect is that anywhere there is a solid pixel in the masking sprite, and another sprite appears in the same area, the BG pixels will show in place of either of these two sprites. The masking sprite is almost always invisible. Ys I & II uses all kinds of masking sprites to allow BG areas to overlap parts of sprites, because the PCE doesn't have priority levels on a per tile. You just rarely see it as a 'mesh', but there are other games that do this for a 'transparency' effect (more so that you can see the object than anything else).
That SGX demo is doing something different ;)