I've created both my diffuse and my black/white transparent map for the model I'm building. I load both maps into the material editor (diffuse from the diffuse rollout and transparency from the transparency rollout). Then I assign the new material to my model and enable the button to show the map in the viewport, I end up…
Here's a picture to show the issue I'm having. You can see the model's texture appears black and white. Instead of showing the diffuse with the appropriate transparency.