Creating Decals
Decals are Smash Hit's version of a billboard, which a sprite that is always facing the player. It's just an image in the scene meant to add a visual effect, such as being creating the illusion of low-hanging fog or being the neon sign on the bowling alley. Note, however, that they do not appear at the lowest quality setting!
You can add a decal by going to the 3D viewport's menu → Shatter → Create decal. You can also use the keyboard shortcut Shift + Alt + X.
The image index of the decal. -4 to -1 are door sprites and 0 to 63 are the standard sprites.
When checked, this will colourise the decal according to the selected colour. For example, if you pick pure red, then the decal will appear to be made of only red.
The colour to colourise the decal as.
This will control the blend mode, which controls how the image is painted onto the screen. If this is 1.0, then the colour will use standard alpha blending. If it is 0.0, then additive blending will be used.
According the the tech wiki anything in between produces a mix of the results, but it is unclear what is means and has not been tested.
How the decal will be sized. By default, decals are 2.0x2.0 units or size 1.0.
The difficulty property allows setting the difficulty range for which the decal will be visible when using mgSetDifficulty.