I'm using a 32-bit PNG with partial transparency as a sprite. In software mode, it displays the partially transparent pixels as fully solid. In GL mode, they're invisible.
Software does not support this feature and probably never will.
In GL it should work but your screenshot looks like some stuff gets clipped away by floor and ceiling.
For the static objects like the lamps and pots, you can work around that by having the shadow/illumination as a separate actor, with its own render style, spawned by the lamp/pot/whatever.