I wish I had pictures of some of my old fading tree work, but what my group did was:
Clone the entire tree
Set the first tree as 50% opacity or lower, depending on size and color.
Set the second tree as entirely removable on tilefade.
Slightly scale down the transparent tree so that it does not show or flicker through at any point on the removable tree.
I should try and duplicate this with some of my newer textures. I bet it would be wicked looking. Although I tend to use some stuff that would make opacity and environment maps screwy now days...so maybe the tradeoff is no longer there....worth playing with to find out.
If somebody wants to play with that idea before I do (because I think I am about to join the current custom content challenge), please let me see what you come up with!