Billboard (plane) and transparency using a tga file (Unity iPhone 1.7)?

I have create a square plane in 3d studio max and brought it into unity as an asset (.3ds file).

I have also brought in a tga file with an alpha channel. The tga file looks fine and I am able to click on the 'display alpha' check box and see the proper transparency in Unity.

I put these two together into a prefab that I instantiate into my scene.

When I see the billboard (plane) in my scene all looks fine except there is no transparency. So I see a solid square plane with black where it should be transparent.

Have I missed some setting / What must I do to get the transparency from the tga file to apply?

Thanks for any help.

You need to apply the appropriate shader to the material that is linked to the plane. Standard import shader of the material will be 'Diffuse' which does not respect transparency - so you'll need to change this to e.g. 'Transparent/Diffuse'.