First of all, you use a Blender Render material in Cycles. Delete it, switch to cycles and THEN create a new material. I dont exactly understand what you mean by "not letting you zoom in". Does it clip out? If yes, adjust your viewport lens angle to something like 60. Could also be that you have another object in zoom focus. To change that, select the "Hair object" in Object mode and press Numpad . (dot/Del) and try to zoom in. Yes you can get rid of the white outline. For some reason, the alpha channel is premultiplied, resulting in an ugly white outline. http://i.imgur.com/a7MXGUF.jpg However, you can get rid of it by inserting a math node, set it to subtract. This way you can remove the white in render mode, but the Material view is now translucent. Not that important, since you can just switch it on when you need to render. http://i.imgur.com/Pt7IeT6.jpg EDIT: You might have noticed black faces on your mesh, this is the result of overlapping meshes on top of each other, and sometimes the backside of those meshes push trough. Those are either shoddy made meshes, or the result of inaccurate import export tools. However, in material view you can get rid of those dark spots by turning on "Backface Culling" in the View properties or change the mesh to Double Sided. In render mode it's a bit tricky, since those dark places are the result of transparent shadows and overlapping meshes. You can reduce the effect to a minimum by simply adding a subsurface modifier. Don't apply it though when exporting, this is just for rendering. EDIT2: Scratch the above. It's probably a bug in the way it reads the .dds file. Save the the texture as PNG and the problems go away.