You can make the shadow transparent with alpha color: glColor4f(0,0,0, 0.6);

Not sure if this is what you are after, but the smoothening of texture's alpha edges is done with:
Code:
glAlphaFunc(GL_GREATER, 0.008);
That means that only color with alpha value greater than 0.008 is rendered.
If you set it like (GL_ALWAYS, 0), it would draw the whole texture as smooth as it is, also fully transparent pixels with 0 alpha.