I want to make a skinning engine capable of drawing custom-shaped windows with alpha blending. That is, it'll use layered windows (UpdateLayeredWindow). A typical window will contain among its background a couple dozens of other bitmaps ranging from 10×10 to, say, 300×150 pixels. In the worst case most of these elements will have smooth animation up to 30 fps. Everything will be alpha-blended and I am going to use Direct2D for this (yes, I know older Windows versions doesn't support it). In general, Winamp's modern skin engine is the closest example.
Given all this and taking in account modern PCs performance, can I just redraw the whole window every single frame or do I have to constrain to some sort of clip rectangle?
I have some experience with this.
If you need to support Windows XP, using UpdateLayeredWindow is the only choice available for solving this problem. The documentation for this call says it copies the whole bitmap to the screen each time it is called and this bottleneck showed up in my benchmarking as the real limiting factor. If your window is 300x300 you pay that price on every update, even if you are careful to modify only a couple of pixels. It would be very easy to over-optimize the rendering side for no real benefit so implement something simple, measure, and then decide if you need to optimize.
If you can drop support for Windows XP then you can avoid UpdateLayeredWindow completely and use DwmExtendFrameIntoClientArea to create the same effect as a layered window. You'll write less code, avoid the UpdateLayeredWindow bottleneck, and D2D will be easier to work with.