From the blog "Introduction to Modding with NIND"

This tutorial goes over how to add transparency to a mesh in an existing .NIF file. Tools Needed: BodySlide and Outfit Studio (v) GIMP - GNU Image Manipulation Program* GIMP DDS Plugin NifSkope setup for use with your textures   *There is also a DDS plugin for Photoshop  Methods: There are currently two methods I know of for applying transparency to armors ingame: Mesh Segment-based: Easy and straightforward