Hm, so the overlay you committed to the repository is just the base texture in greyscale? What I had in mind is doing the same as what we currently do for bitmap-based graphics: Use a base texture which only contains the parts of the texture which are not going to be colorized (rest goes transparent), and an overlay texture containing only the part to be colorized.

> Perhaps it would in some cases be easier to overlay the basetexture with the overlay and don't use an extra texture.

I am not sure I understand this. Do you mean putting both base and overlay into a single texture? If so, then I don't think this works with multitexturing with which I planned to implement this feature (multipass rendering might work though, but I am not sure how to obtain the texture coordinates for the second pass then).

> For example a cross for a knight on his chest. This would be more complicated to make the cross in the mesh to assign the overlay texture to the faces of the cross.

Well, you would have a texture which is mostly transparent except for a small part (the cross). Might be a bit wasteful, but should be easy to create I guess?