This article explains the obvious, but the results are very good.

Now as I write this, I'm waiting for MMF in the mail so the format here generally applies to TGF, but as far as I know, this works in MMF.

Anyway, to create a fading effect with one picture (be it a logo, playable character who can materialize in a level or whatever) go to create an active object.

Double click on the first frame and open up a picture from the hard disk. Now click OK. Drag the first frame into the second frame also and then re-enter the first frame

Completely cover the first frame in white (or whatever colour you want the image/character to morph from) Now exit to the main screen of the active object and right click Frame 1. Select morphing.

Now in the next screen, dont alter a thing. Just step-through and then when it has completed the morphing process, click OK. In the active object main screen, you will see about 10-11 frames each with your picture in. Click OK and exit to the storyboard

Watch; your image/character will morph from the white (or whatever colour you set it) into the full thing.

This is definately stating the obvious, but a very useful tool.