ok, i will try explain it with a high-detail professional concept art:

there we want to have a terrain with grass and a small isle of sand in the middle. between these two textures we want some real smooth vertexalpha-transitions, bro.
see the two mentioned steps?
1. create a mesh with 2 surfaces. one for the gras, one for the sand. the grey lines indicating the quads (each consisting of 2 triangles). the red line indicates the surface border.
2. create a new mesh with one surface and apply the sand-texture to it. you can move this mesh up by, say, 0.0001 unit to avoid some flickering on larger distances on some graphicscards (especially ati ones ;)). create the vertices along the orange quads and create triangles between the red and blue line. then comes the magic: apply vertexalpha of 0.0 to all vertices on the red line, 1.0 to all on the blue line.
that way, you should get something like that: http://eqil.de/hfe/screens/editor/frk_plates.JPG
there we want to have a terrain with grass and a small isle of sand in the middle. between these two textures we want some real smooth vertexalpha-transitions, bro.
see the two mentioned steps?
1. create a mesh with 2 surfaces. one for the gras, one for the sand. the grey lines indicating the quads (each consisting of 2 triangles). the red line indicates the surface border.
2. create a new mesh with one surface and apply the sand-texture to it. you can move this mesh up by, say, 0.0001 unit to avoid some flickering on larger distances on some graphicscards (especially ati ones ;)). create the vertices along the orange quads and create triangles between the red and blue line. then comes the magic: apply vertexalpha of 0.0 to all vertices on the red line, 1.0 to all on the blue line.
that way, you should get something like that: http://eqil.de/hfe/screens/editor/frk_plates.JPG