it is possible to use Alpha Blending in the IMAQ Overlay VIs? That is, i want to Overlay i.e. a rectangle in a transparent way so that i can also see the background image.
As far as I know its impossible, but you can found woarkaround. For example, you can overlay bitmap instead of rectangle: read pixels behind of the rectangle, do Alpha Blending, then create and overlay bitmap.
In the Overlay functions, IMAQ Overlay Rectangle, Oval and Arc have an input named Drawing Mode. If you set this to Highlight, the overlay will be partially transparent allowing the pixels behind the overlay to be visible.