well it's suposed to be able to handle as many decals as a ship needs (ie as much as you'r computer's memory can store) but after a few ships get a bunch of them the decal list probly gets corupted, or you run out of memory, there is a leak somewere and I think it's in the rendering code, haveing something to do with the decals thinking they've been chaged when they havn't
hmm, maybe I should have a prealocated mass of decals that can be applyed to any ships, similarly to how the vertex buffer code works
that's another bug I was worried about, looks like your card might not suport texture clamping very well, what type of card do you have?
though, now that I think about it, that could be caused by corupted decals too...