I am not whether I understand your scenario correctly. Can you please send us a snapshot or a screencast illustrating what you mean by "fade-in and fade-out".
If what you need to do is implement a Transparent Background on the TabItems while moving the mouse over them, then you can examine the attached sample. Basically, when you need to change the RadTabItem visual display, you need to edit the TabItem's ControlTemplate and implement your changes there. In the attached sample solution I only changed the TabItem_Background_MouseOver resource brush, which controls the Background of the RadTabItem while they are not selected, but the mouse is over them.
I hope this info will help you.
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