Yeah this seems like the solution. I took a closer look at Final Fantasy IV and noticed they used gradient decals for bright areas, as the one in the example image.
hmm how do I change this modulation? Is it an engine feature? My biggest problem with vertex colors so far is that I'm not able to make my textures bright with it. Ex: If I paint a face pure white it shows the texture at 100% self-illum instead of actually painting it white. That causes my lighting to look sort of washed…
if you develop nds games like in your example, you just can mulitply vertex colors once. therefore everything will just get darker. this kind of sucks, but i haven't found a good solution, as there are no add modes. all you could do is paint some of your textures in white and greyish details and then color your level just…