This is an unfinished experiment in using a target surface to indicate how decals are displayed (think chipping plaster away from a wall) It was started around 2010, but was abandoned when Portal2 came out with similar technology.
Demo move controls: WASD
Running the demo, you can left click to place a decal on a surface. This will punch through to underlying texture data.
Multiple decals on the same place will keep punching through the layers
By pressing "e" you can enter edit mode. This fixes the camera and allows clicking on vertices to adjust vertex weight depths. Press "e" again to exit the mode.