I'm glad to see you guys are actually making some headway, its pretty exciting. I think having a mix of both M&B style warfare and heroes-only dungeon missions would be pretty freaking awesome.
I don't think anyone answered your question about particles, so let me try. Take a peek at the Torch item in the module system, it'll be commented out. It doesn't work as far as I know, but you can create a similar system with say, a suit of armor for the Fire Golem, or a projectile weapon for the shaman's fireballs. Basically, you'll need to use the ti_on_init_item trigger to set up a particle system. Its kinda complex, but take a look around on the forums.
edit: On a side note, a similar system could be used to create Locust Swarms. Have an invisible suit of armor that emits a particle effect, making it look like a bunch of insects are swarming around a point. I hate those guys, but it would be cool to see.