Let me put my question this way:

We have an ARGB color $7F00FF00
and we want to blend this color with another ARGB color $FFFF0000

We are using D3DBLEND_SRCALPHA for source blend
And D3DBLEND_INVSRCALPHA for destination blend

Thus resulting color will be:

R = ($00*($7F/$FF))+($FF*(($FF-$7F)/$FF)) = $80
G = ($FF*($7F/$FF))+($00*(($FF-$7F)/$FF)) = $7F
B = ($00*($7F/$FF))+($00*(($FF-$7F)/$FF)) = $00

Resulting RGB color is $807F00

But what happens to alpha channel? Does it get blended too? If same formula applies to alpha channel then the resulting alpha chennel is:

A = ($7F*($7F/$FF))+($FF*(($FF-$7F)/$FF)) = $BF

Am I understanding this correctly, or am I not getting it at all? If I am wrong, could you please explain to me, what is the resulting alpha value in this particular case and how you arrived to it?

Thanks.