Images consist of 3 channels. Red, Green and Blue. Each pixel in the image has 3 number values that define what colour to display by combining the specified amount of R, G and B
Images can also have extra channels that can be used to store extra data. The first extra channel is called Alpha. With this each pixel will have 4 numbers defining it - R, G, B and A
Many texture formats include this extra channel to store extra data used when displaying. It can be used to set a level of transparency or other things like reflectivity or shine. With prop textures it will usually be transparency
In DXTBmp when you load a texture you will see the main image data displaying in the main part of the window and the alpha channel will show as a small thumbnail on the right sidebar. If this shows all white then the texture either didn`t have an alpha channel or it was set to be fully opaque.
You can edit the alpha channel using DXTBmp just like you can edit the main image part. The alpha is in shades of grey (it is a 256 colour image) and the same size as the main image so when they are combined together (when you save) each alpha pixel will be linked to the corresponding RGB pixel in the main image. The darker you set an alpha pixel the more transparent the RGB pixel will be when displayed ib FS.
Looking at that blog the instructions there seem fairly clear and you should be able to just follow it through step by step
FSX uses slightly different image processing than pevious versions and the problem seems to be that prop textures designed for FS9 don`t have enough transparency when used in FSX. By altering the alpha channel you can adjust this