
here's the screenshot of my editor as I'm doing exactly what I described - I first created a totally black image and a totally white image; overlapped the two and exported an AVI of it; improrted it back into the editor and made it into an Alpha channel; and placed one pic file above and one pic file below it.
this is the video clip it generated (xvid, small file, under 200k).
one thing that might be the problem is that the Alpha channel is directional in MEP - meaning that you can reverse which way the alpha channel works by clicking on the arrow on it at the far left of the clip (right now, mine is pointed down towards the anime image).
I hope this helps