Creating a new true-color image, filling it with a transparent color, and saving it as a PNG image can be accomplished with the following:

<?php

$new   = imagecreatetruecolor(320, 320);
$color = imagecolorallocatealpha($new, 0, 0, 0, 127);
imagefill($new, 0, 0, $color);
imagesavealpha($new, TRUE); // it took me a good 10 minutes to figure this part out
imagepng($new);

?>

The image needs to be created with imagecreatetruecolor(), you must use imagefill() instead of imagefilledrectange(), and you need to call imagesavealpha(). No other combination of functions calls seems to produce the intended results.

If you need to fill a whole image (immediatly after its creation for instance), consider applying a filled rectangle instead, using imagefilledrectangle() :

<?php

$gdImage = imagecreatetruecolor(100, 100);
$gdColor = imagecolorallocate($gdImage, 255, 0, 0); // red
imagefilledrectangle($gdImage, 0, 0, 99, 99, $gdColor);

?>

which will require much less logic and processing from GD.

Here is a function to generate a gradient.
You specify width, heigth and 4 colors (of the 4 corners).

An image handle of the gradient image will be returned.
You can copy the returned image onto another image using imageecopy.
This can be helpful if you want to generate a shadow for example.
("Glow effect example": Generate 8 gradients, one for each side and one for each corner. The outer side of the gradients have the background color and the inner sides have a bright color such as white.)  

But beware: This function is not optimized for performance, it might become slow on big images. For shadows, better cache the generated gradients.

Note: For gradients, using true-color is highly recommended.

<?php

function gradient($w=100, $h=100, $c=array('#FFFFFF','#FF0000','#00FF00','#0000FF'), $hex=true) {

 /*
 Generates a gradient image

 Author: Christopher Kramer
 
 Parameters:
 w: width in px
 h: height in px
 c: color-array with 4 elements:
    $c[0]:   top left color
    $c[1]:   top right color
    $c[2]:   bottom left color
    $c[3]:   bottom right color
    
 if $hex is true (default), colors are hex-strings like '#FFFFFF' (NOT '#FFF')
 if $hex is false, a color is an array of 3 elements which are the rgb-values, e.g.:
 $c[0]=array(0,255,255);
 
 */
 
 $im=imagecreatetruecolor($w,$h);
 
 if($hex) {  // convert hex-values to rgb
  for($i=0;$i<=3;$i++) { 
   $c[$i]=hex2rgb($c[$i]);
  }
 }
 
 $rgb=$c[0]; // start with top left color
 for($x=0;$x<=$w;$x++) { // loop columns
  for($y=0;$y<=$h;$y++) { // loop rows
   // set pixel color 
   $col=imagecolorallocate($im,$rgb[0],$rgb[1],$rgb[2]);
   imagesetpixel($im,$x-1,$y-1,$col);
   // calculate new color  
   for($i=0;$i<=2;$i++) {
    $rgb[$i]=
      $c[0][$i]*(($w-$x)*($h-$y)/($w*$h)) +
      $c[1][$i]*($x     *($h-$y)/($w*$h)) +
      $c[2][$i]*(($w-$x)*$y     /($w*$h)) +
      $c[3][$i]*($x     *$y     /($w*$h));
   }
  }
 }
 return $im;
}

function hex2rgb($hex)
 {
 $rgb[0]=hexdec(substr($hex,1,2));
 $rgb[1]=hexdec(substr($hex,3,2));
 $rgb[2]=hexdec(substr($hex,5,2));
 return($rgb);
 }

// usage example

$image=gradient(300, 300, array('#000000', '#FFFFFF', '#FF0000', '#0000FF'));

header('Content-type: image/png');
imagepng($image);
imagedestroy($image);

?>

chess board
<?php

$kep = imagecreate(400,400);
$fekete = imagecolorallocate($kep,0,0,0);
$feher = imagecolorallocate($kep,255,255,255);

//imagefill($kep,50,50,$fekete);
imagefill($kep,50,20,$feher);

for ($i=1;$i<8;$i++)  {
  $k = $i*50;
  imageline($kep,0,$k,400,$k,$fekete);
  imageline($kep,$k,0,$k,400,$fekete);
  }

for ($i=0;$i<8;$i++)  {
  for ($j=0;$j<8;$j++)  {
    $x = $i*50 + 2;
        $y = $j*50 + 2;
    if (  ( ($i % 2) + ($j % 2) )  % 2 == 0 )  {
          imagefill($kep,$x,$y,$fekete);
          }

    }
  }

// imagecolortransparent($kek,$piros);

header('content-type : image/png');
imagepng($kep);

?>

imagefill can't deal with alpha colors, use imagefilledrectangle instead.

<?php

    header("Content-Type: image/png");
    $im = imagecreatefrompng("img/button.png");
    if (empty($_GET['alpha']))
        {$_GET['alpha'] = 10;}
    $color = imagecolorallocatealpha($im, 255, 255, 255, $_GET['alpha']);
    imagefillalpha($im, $color);
    imagepng($im);
    imagedestroy($im);

    function ImageFillAlpha($image, $color)
    {
        imagefilledrectangle($image, 0, 0, imagesx($image), imagesy($image), $color);
    }

?>

I spend more then two hour to find a function that can fill a pattern or file as background instead of color. but i can't find. so i develop the following function. i though this function will save time who need it...

Function will get four parameter
1. Main Image Identifier
2. Pattern Image Identifier
3. Final Image Width
4. Final Image Height

If you set final image width or height is less then main image width or height then you may get wrong result

<?php

function fill_with_patternfile($p_main_im, $p_patternfile_im, $p_width, $p_height){
    $pimiX=$p_patternfile_im;
    $pw=imagesx($pimiX);
    $ph=imagesy($pimiX);
    $targetImageIdentifier=imagecreatetruecolor($p_width,$p_height);
    if($pw<$p_width && $ph<$p_height){
        for($pX=0;$pX<$p_width;$pX+=$pw){
            for($pY=0;$pY<$p_height;$pY+=$ph){
                imagecopy($targetImageIdentifier,$pimiX,$pX,$pY,0,0,$pw,$ph);
            }
        }
    }else imagecopy($targetImageIdentifier,$pimiX,0,0,0,0,$pw,$ph);
    $w=imagesx($p_main_im);
    $h=imagesy($p_main_im);
    $nX=0;
    if($w<$p_width) $nX=intval(($p_width-$w)/2);
    $nY=0;
    if($h<$p_height) $nY=intval(($p_height-$h)/2);
    imagecopy($targetImageIdentifier,$p_main_im,$nX,$nY,0,0,$w,$h);
    return $targetImageIdentifier;
}
//    If you want to use a gif or png file as
//    pattern file you need to change function below :)
$pattern_im=imagecreatefromjpeg('logo.jpg');
//    If you want to use a gif or png file as
//    main file you need to change function below :)
$main_im=imagecreatefromjpeg('r2.jpg');
//    call the function width 500 and height 500
//    if your width and height is less then main images
//    width and height then you can't understand any change!
$final=fill_with_patternfile($main_im, $pattern_im, 500, 500);
//    view the image and destroy all instance
header('Content-type: image/jpeg');
imagejpeg($final);
imagedestroy($final);
imagedestroy($main_im);
imagedestroy($pattern_im);
exit();

?>

//A smiley face ;]

<?php

header('Content-type: image/png');

$smile=imagecreate(400,400);
$kek=imagecolorallocate($smile,0,0,255);
$feher=imagecolorallocate($smile,255,255,255);
$sarga=imagecolorallocate($smile,255,255,0);
$fekete=imagecolorallocate($smile,0,0,0);
imagefill($smile,0,0,$kek);

imagearc($smile,200,200,300,300,0,360,$fekete);
imagearc($smile,200,225,200,150,0,180,$fekete);
imagearc($smile,200,225,200,123,0,180,$fekete);
imagearc($smile,150,150,20,20,0,360,$fekete);
imagearc($smile,250,150,20,20,0,360,$fekete);
imagefill($smile,200,200,$sarga);
imagefill($smile,200,290,$fekete);
imagefill($smile,155,155,$fekete);
imagefill($smile,255,155,$fekete);
imagepng($smile);

?>

I feel its worth pointing out that you cannot fill a transparent colour that you have assigned with imagecolorallocatealpha, the colour will fill, but without its transparency,

I find the easiest method around this is to just fill a rectangle using imagefilledrectangle() to draw a fill instead.

This function does not seem to work with images already been transparent. If you fill at x=0, y=0, and there are still transparent parts that you did
not reach with your fill, they change to a different color.

The ImageColorSet function seems to be the solution, but i can't work with transparancy.

For new images, you must allocate a color before this function will work.

is there any point to use $x and $y coordinates? They doesn't affect an output in any way. I can no make rectangular half filled with color. These params are useless.

Use imageSaveAlpha($image, true); to preserve transparency.

Example 1
The filled region will be external to a demarcated region, if the initial coordinates will be outside of this region.

<?php
$src621 = imagecreate(200,200); 
$clr_1_621 = imagecolorallocate($src621, 255, 255, 0);
$clr_2_621 = imagecolorallocate($src621, 0, 0, 250);
$clr_4_621 = imagecolorallocate($src621, 2,2,55);
imagerectangle($src621, 100, 100, 150, 150, $clr_4_621);
imagefill($src621, 110, 110, $clr_2_621);
header("Content-Type: image/png");
imagepng ($src621);
imagedestroy($src621);
?>

Example 2
The filled region will be internal to a demarcated region, if the initial coordinates will be inside of this region. 
<?php
$src622 = imagecreate(200,200); 
$clr_1_622 = imagecolorallocate($src622, 255, 255, 0);
$clr_2_622 = imagecolorallocate($src622, 0, 0, 250);
$clr_4_622 = imagecolorallocate($src622, 2,2,55);
imagerectangle($src622, 100, 100, 150, 150, $clr_4_622);
imagefill($src622, 10, 10, $clr_2_622);
header("Content-Type: image/png");
imagepng ($src622);
imagedestroy($src622);
?>

See another examples at:
http://www.educar.pro.br/a/gdlib/index.php?pn=50&tr=97

Didn't see this documented, although it's outlined in imagefilledrectangle, it wasn't quite so obvious to me at first

imageSetTile($image,$imageBack);
imagefill($image,0,0,IMG_COLOR_TILED);

Will fill an image with a texture (this is great as I'm building a logo/template creator)

This function, cannot deal with transparencies. 
So you need to use imagecolorallocate instead of imagecolorallocatealpha.
Thus, be careful with color variables that allready set with imageallocatecoloralpha because this can slow-down or hang-up your system.

Actually, it can handle pre-transparent images. To remove it you need to do something like:
   imagecolortransparent($img, 0);
to null out the previous transparency colors. ;)