I agree. Using custom images as transparent sprites is probably the way to go here. If you wanted to make is more 3d than just putting an animated sprite onto the ship thrusters you could try this. Make a cub object that fits inside the thruster. UV map transparent, animated sprites on each side of the cube. Top, bottom, back, and the sides. You won't need to do the front because it will be inside the ship. After you map them onto the cube just make sure the transparency is turned on and see what happens. You could also do something like a cylinder and just wrap the uv fire around the cylinder and animate that. I hope i helped a little.
The scarecrow has no mind, but serves its function well.