Quote: "does this mean I have particles at my disposal? Does this mean I can make steam vents and the such?"
It's not a true particle system, just a clever use of animated textures (decals). If you have a look there are some steam anims included for you to place in your games.
Quote: "if one was to make a terrain object so that one could fool the public into thinking your level was outdoors when in actuality it is an indoor level - would one import that terrain as an entity or as a segment?"
Entity - you don't need it to be a segment unless you need to actually paint and have it all join together in the editor itself.
Quote: "but I guess an entity is made for picking up, because when I ran over the terrain (scaled wayyyy the heck down) - the game said I now owned it"
You must have used an entity script from an object that you can pick-up
Set it to "static" for a start, or just copy one of the existing scripts for an in-animate, inmovable object like a termain or pipe.
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