just to say, Ajax has a neat thread here about how to do this spatially with the P-node.  he uses it to create a slime layer in his example.  i used it to create my most popular piece, Reaching For Life.  the awesome thing about controlling the blend with the P-node is you can use the same transition area across objects.

http://www.renderosity.com/mod/forumpro/showthread.php?message_id=1751108&ebot_calc_page#message_1751108