The area under your tree could be compacted and might benefit from some extra water and top dressing with compost...

As to whether azalea would grow there could depend on what type tree. Dappled shade with some sun striking the plant at different parts of the day is OK (for the most part, azaleas are woodland natives); planting these surface rooters under a tree that also has a surface rooting habit is not.

Mature oaks, most pine is fine, also deciduous magnolia, dogwood, silver bell, sour gum, others.

Not good - ash, beech, elm, some maples, poplar, pin oak, sycamore, black walnut. Birch are both surface rooted and aphids magnets - the aphids secret honeydew that is troublesome when falling on rhododendron and azaleas.

I do not know what type of tree this is but you're right the ground in that area is compacted. It wasn't after we moved here because we did a major landscaping overhaul and tilled up the entire yard but over time its grown compacted again. I do know however that it is not a surface rooter or I think so because none of the roots are visible. I wish I knew what type of tree it is. It is evergreen but the branches start high up enough for sunlight to get in from the sides since there are no other trees around and the canopy isn't that dense, so dappled sunlight does get in. I guess my concern is maybe its not the sunlight I need to worry about but the tree itself? It seems to be taking all the nutrients from the grass and doesn't let it grow, so I worry that maybe an azalea wouldn't survive there either...

I wonder if your problem is lack of sufficient sunlight due to the tree foliage. Most grasses need around 6 hours or more of sun to grow well in a spot. Since you do get some sunlight, azaleas may be able to grow there provided all their other requirements are met (dappled sun, moist acid soil, the "right" USDA Zone Climate for your variety and 2-3 inches of mulch).

I suggest you try with one plant now and evaluate how well it does by the Fall or by Spring 2007. If you decide against growing azaleas under the canopy of the tree, then consider some bulbs (daffodils, etc), hostas, ferns (autumn, royal, etc) or ground covers that appreciate some shade - Asian jasmine, English ivy, Persian ivy, liriope, ophiopogon, horseherb, etc. And do not forget that just plain mulch is OK too; the trees love it!

Good luck, Luis