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It might mean you have a ; after the declaration of the function and also the prototype. Check that. Also make sure you have a prototype if you don't becuase if other functions call it they may not know about it. the prototype will let them know about it.
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I tried something unprecedented: Reading the chapter that the program came from. I found this:
"The TransparentBlt() function is part of the Win32 API, but it requires the inclusion of a special library called msimg.lib in order for your games to compile properly. This is a standard library that should be included with your compiler, but you'll need to make sure that it is linked in with any programs that use the TransparentBlt() funcion."
I have no idea how to link it with my project.