Not being able to use true transparencies with ArcGIS colour ramps where only solid colours are allowed has me always wondering about how to improve the look of the surface in my maps without resorting to time-consuming post processing techniques. (For example the basic graduated black colour ramp typically used with hillshade does not have levels of transparent black but rather shades of grey and solid white where 100% should be. A as a result, it is not possible to overlay a hillshade without impacting the colours of the features under the hillshade; overlaid colours will appear washed out)
In this discussion @matt wilkie provides a link to GDAL's gdaldem for producing a hillshade without Spatial Analyst using. He also includes a link to Terrain Data Tutorial which shows how to how to use gdaldem to build a "composite hillshade with hypsometric tinting".
Can ArcGIS (Spatial Analyst, 3D Analyst) be used to produce a similar "blended" product?
Best Answer
It's possible.
From the ArcGIS Resource Centre blog by rajnagi: An alternative to overlaying tints on hillshades.
This involves several steps, first of being to convert the DEM to an RGB based raster. This is done by "exporting" the raster to a new dataset after you've applied the desired colour ramp.
I'm posting the article contents below as sometimes links can disappear and become null.
From the article: