with embedded-grayscale-alpha-channeled tex, which water in quake games traditionally uses, the alpha channel would scroll with the tex, so limiting the type of blends we could do with it.
eg, a waterfall could have faded edges but the top and bottom of the scrolling tex would have to be opaque, so where the waterfall touched the pool of water, there would be an obvious seam… although that could be partly hidden by mist at the bottom of the waterfall.
alphamaps which use indexed-color-bitmaps to set vertex alpha on the brushes or mesh themselves, allowing us to have a scrolling tex along with it`s alpha channel, blended with the non moving vertex alpha.
eg, a waterfall using this method, could have the sides as well as the top and bottom of the falling water translucent, so there is no obvious seam where it meets the pool.
also a stream running along a ditch could have translucent edges, and where the flowing water meets other bodies of water, the blends can be very smooth.
this is how I did my soft edge water, but the bitmaps were a real pain to make, especially with non axial meshes, as it`s almost random and very difficult to map the pixels on the bitmaps to the where the vertexes are on the meshes.
hopefully what ydnar has now implemented, is a more predictable and reliable way to set the alpha on brush or mesh vertexes.
I know it has something to do with painting special shaders onto our brushes in radiant, like we do with the dotproduct blends, but unlike dotproduct, this new blending won`t depend on slopes to set the alpha.
so another eg, would be to have a large flat patch of grass, and blend in some dirt tex or perhaps a winding road, again without the need to use alphamaps, well I`m hoping that is the case 
but I too need to see a sample map of how this is set up, as I don`t have time to just experiment like I did with the alphamaps.