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1) & 3) Two small tweaks to the script, this explains the changes:
-- 1) changed this line:
if U.PlayerLookingNear( e, 300, 130 ) and playerCanSee( e ) then
-- Changed the second number to 300, this number is the range within which the entity will be
-- detected, this is measured from the origin point of the entity to the current player
-- position. (see utillib.lua module to see how this is coded).
-- For a large object the player probably can't get close enough to trigger with the
-- original value.
-- Changed the second number to 130, this number controls the angle within which
-- to detect an object. (i.e. makes sure the player is roughly facing the object)
-- The playerCanSee function btw uses a ray cast to work out if there is anything
-- between the player and the object detected, i.e. so you can't 'see through walls'.
-- 3) changed this line:
if eyeOn[ e ] and g_KeyPressE == 1 then
-- See told you it was an easy change. /:-]
2) Pop your image into gimp or paint.net and clean it up, the background of the image needs to be alpha.
Make sure the image is a RGB+Alpha image, you may need to convert it using whichever image editor you have.
Been there, done that, got all the T-Shirts!