Shadows don't render on materials with rendering mode set to "fade" or "transparent"

(Taken from forums where there is no answer: http://forum.unity3d.com/threads/shadows-dont-render-on-materials-with-rendering-mode-set-to-fade-or-transparent.308451/ , As I have the same issue... even when Receive Shadow Flag is TRUE)

I'm not sure how to approach this problem.

If I set the render mode of a transparent texture to "fade", it no longer receives shadows, but the material looks very nice, with smooth, clean edges.

If I set it to "cutout", it will receive shadows, but the edges are sharp and ugly.

How do I go about getting both clean edges and shadows?

Thanks