Actually I have v8 since JP told me to not upgrade, the tutorial was quite useful, except I don't see where it mentions translucent/transparent textures, step 35 just shows how to make them glow (if i read it right)
No. You can use images that are 2048 x 2048 (mind you that does take up memory). The only rule is that they must be divisible by 8. I use a dummy alpha which is 64x64 and most of my child textures are 256x256. Take a look at the art of railworks' and you will find some meet advice from RWDerek.
"So much energy harassed in these beasts." ~ styckx "If you like it, then yes. If you hated it, then no, that was some other guy." ~ SMMDigital