I'm doing what I think is the final 3.6 build now. I've got the finished decal textures from Rich, and I made some small adjustments to the way these work.

During development, I was not a fan of the "Decal Mode" material setting. It's terribly confusing, and it's unrealistic to expect that everyone is going to adjust all their materials for an obscure setting that isn't intuitive at all.

Basically decals tend to have two kinds: Big decals are used to add detail to the map. Small decals are used for bullet marks. There are other uses, but this covers 95% of what you would want to do with them.

I set it up so decals have a checkbox in the properties that allows you to select which types of entities they appear on, brushes, models, and/or terrain. You can also call Decal::SetRenderMode(classid, mode) to control whether they appear on a per-class basis:

decal:SetRenderMode(Object.BrushClass,true)

The build will be up on the beta branch shortly.