In InDesign (CS6 on a Mac running 10.8.4) I placed an Illustrator file, reduced its transparency to 10% and moved to the back as a watermark. On top of I placed a Photoshop file. The document looked fine on-screen and printed fine when exported to PDF, but when I went to Print Booklet, the Illustrator graphic was knocked out over top of the Photoshop file. I tried putting them on separate layers, locking layers, putting the graphic on the master page, all to no avail. I finally gave up and exported the graphic to a JPG and that worked, but it's not a very satisfactory work-around. Can anyone shed some light on what's going on here? Thank you!!
Did you try checking Simulate Overprint in the print settings?
That did the trick -- thank you!!