Alpha blending is, to say the least, handy. In 3d modelling, you can find plenty of uses for it; say, creating hair or leaf textures, translucent or transparent materials, and so on. Needless to say, XNA can do it.
For this example, we’ll use a terrain model that’s made up of two meshes; a grid, which will represent the ground, and a cube, which will represent the water. The Blender file for this model can be downloaded here. Yes, I know it’s ugly.