Originally posted by Johan K: Purple (255,0,255) is supposed to be the shadow color. It darkens the color behind it. If you want something more complex, you might try using an alpha channel. I think that should work even though the standard sprites don't use that.
Odd - I tried this, but ended up with opaque purple (actually, radioactive pink) instead of a shadow. Maybe because I am also using alpha channels in the tga? Or something else.