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Step 1: Start VC0.08
Step 2: Click on "msts2locomotion"
(Now in the msts2locomotion window)
Step 3: Click on open
Step 4: Find the MSTS model you wish to convert, and click open.
Step 5: Change "Y off-set" to around -0.2 or -0.3 (in the camera options)
Step 6: Click on measuring tool
Step 7: Place the measuring tool over the image created, and make shore it all fits.
If it doesnt fit, either too large or too small, then decrease or increase the distance (In the camera options)
Step 8: Once that is done, click on export.
Step 9: once it has gone throught all the rotations, find where the images are stored.( ie C:\LoMO\Graphics\...)
Step 10: Convert the images into .png by using a number of programs that can be downloaded, by applying the required pallet.
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How to convert using Wally (where's wally = old joke, but still funny; google it)
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Step 1: Start "wally" up
Step 2: Click on "file" --> "Batch Conversion"
Step 3: Chose the source directory (where the bmp's are)
Step 4: Chose the destination directory (where the converted images will go)
Step 5: In image wild card; type in *.bmp
Step 6: Change the output to Portable Network Graphics (png)
Step 7: Click on "wally settings" This is located top right of that window.
Step 8: Batch Convertion ; Change the image type to PNG
Step 9: Batch Convertion ; Change the destination to "use this pallet"
Step 10: Batch Convertion ; find the required Loco.pal (locomotion pallet)
Step 11: Batch Convertion ; click on "retain these pallet settings..."
Step 12: Wally ; Make shore the export options are set to 8-bit
Step 13: Wally ; Change the brightness level as you see fit. (I find above 2.00 grammer just fine

Step 14: Click "ok" (this should send you back to the "batch conversion window"
Step 15: click "GO"
Step 16: Close "Wally" (you can find him another day)
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And that's how I convert
; Now back to making the model
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Step 11: in the "Main" window; under general, make an internal name. (this name cannot be longer then 8 accross, and is the name of the .dat file)
Step 12"Main": Change the "subclass" to what it is, either a loco, or wagon.
Step 13"Main": Make a "description" of the train, this is what people will see when picking what loco to buy.
Step 14"Main": select the; HP, WEIGHT, RELIABILITY, SPEED, DESIGNED IN, OBSOLETE FROM.
Step 15"Main": Chose the cost factor, this I frankly have no idea about, but I was told, 50 is for diesel trains.
Step 16"Main": Chose the running cost index, depending on what it is.
Step 17"Main": chose the running cost factor, I was told 15 is good for diesel trains.
Step 18"Main": under "flags" leave all the bits alone, apart from announce, and put yes if you want to see the annoucement.
Step 19"Main": Under "requirements" tick what that loco needs to move.
Step 20"graphics": Select the sprite folder, where the png images are kept. (ie.. C:\LoMO\Graphics\2101\... )
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I will add more onto this later, once I get re-used to it.