Here's some things I learned making a Holodog

TEXTURE
The .dds texture file needs an alpha channel to determine what will be transparent.
For Blue, I made a 50% gray mask, and applied it in DXTBmp. The alpha channel can also
determine how transparent something is. Black is completely transparent, white is opaque, 
and all levels of gray in between determine the transpareny value

MESH
The transparency of the mesh needs to be changed in nifskope. 
Here's what I did:
Open the .nif in nifskope
Expand 0 NiNode, Scene Root
Expand the top node under 0 NiNode. For me it was 1 NiTriShape or 1 NiTriStrips
Expand 3 NiAlphaProperty (if it's not under the top node, work your way down until you find it.
It applies the effect globally to the nif)
Change the value of Flags to 4333. (Your model won't show as transparent unless the texture is showing
in nifskope. However, it will be transparent in game)
*I made Blue using the 4333 Flag. Alternately, 4163 also makes the mesh transparent, but I havent 
tested it in game to see how it works.)

GECK
Once you've got your character/creature set up in the GECK go to the tabe Actor Effect List
Add the following Actor Effects:
NVDLC01HoloFireImmunity
NVDLC01HologramFlickerSpell
NVDLC01HologramNeutralSpell
NVDLC01HologramRegen

Make a script for your companion or creature that uses PhantomShad0w's DHEHologramEmitter Script, or copy
it from Blue's Script in this mod
Your character script should be automatically added to the following Effect Shaders
NVDLC01HologramAgressive
NVDLC01HologramAttention
NVDLC01HologramNeutral
You can check the Use Report if you right click on the Effect Shader in the GECK and select
Use Info