Combining Objects into Blocks - AutoCAD 2011 and AutoCAD LT 2011: No Experience Required - page 361

Here you can toggle transparency on and off and adjust the degree
of transparency for the tool palettes and many other palettes in the
software.
WARNING autoCaD might display a notification dialog box,
rather than the transparency dialog box, if your video driver and operating
system combination is unable to display palette transparency.
FiGuRE 7.60 The tool palettes with the Architectural tab active
FiGuRE 7.61 The Transparency dialog box