I'd recommend using a png file as the texture with transparency. Gif will work too (but you won't get the no. of colors).
The textures are per-object and currently independent of materials. Simply select Object->Texture->Load-Texture to set your texture. Changing the material will affect the overall appearance of the surfaces 'underneath' the texture e.g. changing the color from white will 'shade' the whole texture.
Andy
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