All the FiireStations, 1" and 2.2" and STB, use the same graphics engine, based on an embedded Via solution. Neither the standard Via Linux drivers, nor the OpenChrome drivers support alpha-blending. Only nVidia does, but nVidia has problems with video tearing. So, special drivers were developed just for LinuxMCE for the Via engine. Fiire licenses those drivers.
These drivers do support alpha blending and high-quality video playback. The alpha blending is done in a non-standard way. It doesn't use Xorg's composite extensions, and the popup portions of the menu are not alpha blended. However the menu itself is. So is the media file browser screen.
The big problem with these licensed drivers is that MythTV doesn't work with it, nor does Kubuntu 0704 or 0710, or the KDE desktop. So, the FiireEngine ships with a special diskless image for the FiireStations based on Kubuntu 0610 without KDE. It works fine for media playback, and you can record Myth shows on the FiireEngine, but you cannot run Myth locally.
We're currently trying to get the OpenChrome and/or Via stock Linux drivers to work with the Fiire Stations and Kubuntu 0710. When we do, FiireStation users will have the choice of using those standard drivers with the latest LinuxMCE, Myth, and KDE, but without alpha blending, or continuing to use the proprietary drivers which we licensed which do alpha blending, but don't run Myth or KDE.