You're probably using a system-wide theme installed with Eterm. Creating a user .Eterm directory with your own configuration files will allow you to set Eterm up any way you want for any number of applications.
cp -r /path/to/Eterm/themes ~/.Eterm
Create a new file called ~/.Eterm/themes/Eterm/user.cfg
Read the Eterm manpage, specifically the configuration section. This will tell you most of what is needed to customize the look of Eterm. Anything you add to user.cfg will override the same settings in the current ~/.Eterm/themes/Eterm/theme.cfg (check out this file for some ideas on how to set it up). You can create as many cfg files as you want, and use them with
Eterm -X configfile.cfg
You could also edit ~/.Eterm/themes/Eterm/theme.cfg instead of making a user.cfg, but I prefer having more options than that.
Some Eterm packages are built poorly...I'm using SuSE9 and found nothing but annoyance with their Eterm package. The only way I was able to get transparency was to remove Eterm and recompile it myself.