Go to Robot Arena/Graphics/Main Game
Modify the .txt files for damage so they look like this:
EnableAlpha TRUE
ColorKeyEnable FALSE
ZTest TRUE
ZWrite FALSE
EnableLight FALSE
SrcBlend D3DBLEND_SRCALPHA
DstBlend D3DBLEND_INVSRCALPHA
TSSAlphaOp SELECTARG1
TSSAlphaArg1 TEXTURE
TSSMagFilter Linear
ZBias 0
TSSAddress CLAMP
ZFunc D3DCMP_LESSEQUAL
An in-game image displaying the damage textures:
Note: Go to options and set the graphics to High and select 3D Software Acceleration.