I've had semi-transparent terminal windows going on many years now. I keep them 80% opaque in the foreground, and drop it down to 75% opaque for inactive windows. I also apply a nice blur effect to the background (with the active window having a higher blur amount). It's really nice; lets me see what's behind the window, without detracting from the readability of the terminal itself.

Transparency without blur might be problematic though.

I have to admit I have been using transparency more lately. It is great when you are quoting something or trying to duplicate a ui in html.

Granted, it is much more heavily used in screenshots than it is anything else. :)

I use transparency on terminals since I use X. Its not to bad if i dont have it, but on a tiling wm its the only way to see whats your background image ;)

Yeah, its useless. But a bit of candy is not to bad.

When I first saw them I thought transparent terminal windows were the coolest thing. Then I tried to use one...

So, as other commenters have pointed out, using blur and/or 80% opacity helps with this. One thing I haven't seen (with this terminal or any other) is to actually outline each character in black (assuming white on black color scheme). That would give some much needed contrast, while still allowing areas with no text to be visible without much or any blurring and perhaps not needing the opacity set so high.

I allow slight transparency through terminal windows, perhaps 10%. This allows me to see motion in background windows, which is useful for keeping track of processes like lengthy compiles.

Why would it be absurd? Do you use a monochrome display? Because, let's face it, black/white is all you need. Or green/white.