1)
you first need to identify an appropriate image and crop it so that it is multiple of two along its edges. typically a (not oblong) flag is 256 by 256 pixels (or 256 by 128 if the flag is oblong) and a sail is 512 by 512. these are the sizes expected when your flags and sails are previewed in the "Modify Sails & Flags" part of the game. however the game is smart enough to resize either one of them if you scale up or down, so what you see here is not how either will appear in the game unless you did use the expected dimensions
the source images can be a jpg, gif, etc. I find the freeware program
Irfanview handy to do this cropping and resizing, but you can use any other program that accomplishes the same thing
2)
you need to convert the image to dds format. there is another freeware program called, appropriately enough,
DDS Converter. this program will not work unless the sides of the image in the file to be converted to dds are a power of two (see above). it does a batch conversion (not an instant conversion where you stay inside the program after the conversion is done) of one or many files at once
3)
copy the dds file(s) into the "custom" subfolder under your Pirates directory (such as Pirates\custom)
4a)
for flags, rename a given file "flag_
xxxxx.dds" where
xxxxx is the name you want for the flag (this filename is in the \custom folder, but is not indicated in the game when you select a flag)
4b)
for sails, rename a given file "ship_sail_emblem_lrg_
yyyy.dds" where
yyyy is the name you want for the sail (this filename is in the \custom folder, but is not indicated in the game when you select a sail)
256 by 256 is good enough for a sail, so the exact same dds image can be used as both the (not oblong) flag and the sail provided it is renamed using the guidelines above
when you select a flag or sail in the game, the order left to right on the screen is the alphabetical order of the filenames in the \custom directory
sometimes on sails the edges of the image bleed over creating undesirable streaking. in Irfanview to prevent this put a "canvas" of at least 4 pixels on all four sides of the appropriate color to be taken to the edge of the sail. the image must then be resized back to a multiple of a power of two before DDS Converter can convert it to a dds file. if the original image was also used for a flag it is up to you whether to replace that file since either original or the canvased file work fine
when testing a flag or sail in the game sometimes it is necessary to quit the game and restart for the flag or sail to be found
