Transparent controls

Question

Does anybody know how to get custom control (with a transparent background) to actually display the content underneath it rather than the Form's background color?

Try this for yourself: Create a custom control with a red background and then create another custom control with a transparent background. Lay down the red custom control on a Form, and then lay down the transparent custom control on-top of the red control such that its entirely contained within it. Run the application. Instead of the transparent control displaying the color directly below it (red), it displays the content of the Form below the red control.

I'm trying to overlay two custom controls. The background control is a custom oscilloscope screen with dozens of custom properties, events and methods. The Foreground control is a custom enunciator control (actually a series of them) that has, among other things, transparent content. Even though the foreground control's backcolor property is set to transparent, all I get is a block of color identical to the Form's background color. I don't even have to draw on the foreground control. I always get a block of color equal to the Form's background content. 

See the attached application if you like.