Transparent JPEG images

Some retards say you cant do that and that JPEG sprites look awful.

But how about storing alpha channel inside of unused HSV ranges?

Use PNG.  If you care about file size (you don't, you just think you do), then use images that compress better.  Reduce the number of colors, reduce the size and rescale, whatever.  Or, be an idiot and reinvent the wheel by adding alpha to JPG.  Sometimes it's good to go through the exercise just to confirm to yourself that you're a moron.