Mary Evans posted a link to Phill Walton’s What No One Told You About Z-Index in the Moodle forums. It is a very good read about how z-index is actually specified to work by the w3c. A lot of stuff I didn’t realize, specifically around stacking contexts and opacity.
Based on Mary’s post I find myself wondering if opacity assigned via CSS is a good way to go or if in most cases a background assigned and rgba color is a better solution. With a background you are less likely to get hit by all of the opacity issues but you also have less browser support. The other issue/benefit with a background color is that you don’t get the opacity inheritance, meaning children aren’t opaque.
In the end rgba only works in places where you can use a background. It doesn’t work for opaque images like in the case of only wanting actions links to show completely on hover. Of course this could be handled in many other ways too.