The current decal system is adequete, but produces some strange results. For example when you display a fire decal and walk around, it becomes very obvious that the decal is always facing the player. The effect is akin to the decal being rotated to always face teh player (not exactly what is going on, but thats how it can be percieved)
My suggestion is an additional decal entity that is just a small cylinder with a decal wrapped around it as a texture. I know This is basically asking for animated texture support, but if done right it would be more immersive and make some decals look more 3 dimensional.
