Pronunciation[trans-loo-suhnt, tranz-]
–adjective
1. permitting light to pass through but diffusing it so that persons, objects, etc., on the opposite side are not clearly visible: Frosted window glass is translucent but not transparent.
2. easily understandable; lucid: a translucent explication.
3. clear; transparent: translucent seawater.
When the snes came out, everyone flipped out when they saw colours and objects overlapping each other and creating the resulting colour/texture appear in real time. Instead of going with more ram, they went with a more powerful GPU, which was supposed to be what killed the NEOGEO. Technically, snes was the xbox of it's time, only it had good games. People say if the NEOGEO had translucencies/transparencies it would've been able to compete with the snes in it's target market.
Some Snes Games with translucency/transparency:
Chrono Trigger:

(it's the clouds)
DBZ Hyper Dimension:

Most of the beam attacks had a translucent "shaft".
Also, Starfox for the snes had a noticable transparency when you dropped the bomb. (I couldn't find a pic of it asploding, if a mod finds one edit it into my post...)
It seems small, but it was huge when it came out. It's funny when you put it all into perspective; back then we were blown away by colours merging. Now we demand things like anistropy, texture/bump-mapping, vertexes and anti-aliasing.