The Problem
Imagine, you would like to use your own raster image in Google Earth (ground overlay), but it should meet two conditions:
1. The raster should only be seen over the land
Original View With ground overlay
2. It should start gradually disappearing after you zoom in to a certain distance, and eventually become invisible.
Solution

The workspace above takes two georeferenced TIFF images as input:
TIFF RGB24 (Map for overlay)

IFF CCITT-FAX4 (1 bit) (Mask)
The mask image should make all the world's oceans transparent so that only land coverage is shown in Google Earth. Before the mask can be used, the palette and some attributes (fme_basename, geotiff_compression_method, geotiff_number_of_bits_per_cell) should be removed with RasterPaletteRemover and AttributeRemover respectively.
The reason for removing attributes from the mask image may need some explanation: when two images are processed by the RasterExpressionEvaluator (Image A and Image B), all the format attributes will be taken from Image B, so if we use two images of the same format, the original format attributes of Image A will be overwritten.
In our case, this will mean that our RGB24 image will "think", that it is only 1-bit raster. This confusion may lead sometimes to nice artistic effects:

Of course, this is hardly acceptable for any productive work.
Once our mask image is ready, we pass both images to the RasterExpressionEvaluator, where, with a simple expression, we say "leave all colors as is, but add an alpha band and make everything over the land opaque (mask cell value 1), and everything over the ocean transparent (mask cell value 0)":
A[0];A[1];A[2];if(B[0]==0,0,255)
Our last step sets LOD (level of detail) for the ground overlay:
Zeros in 'Minimum Display Size' and 'Fade Extents' mean that our ground overlay will be seen from the smallest scale.
'Maximum Fade Extent' indicates when the feature shoud start fading, and 'Maximum Display Size' controls when the image will completely disappear.
When we write out a KML, the 'Raster Output Format' parameter should be set to PNG, which supports RGBA32 interpretation, that is, allows transparency.