Shadows

This is a far too open question to give a detailed answer, so I'll just make some general points:

- when using sprites, shadows can be placed in the sprite artwork and as seperate sprites.

- since DX8 finally dropped an exclusive 2D mode, feel free to just place appropriately shaped and coloured polygons in your scene to be your shadows.

- your typical graphics book will likely have a section on shadows, it's probably a good idea to start perusing whatever literature is available.

- you may want to talk to a sprite artist to see what techniques they use. We programmers don't always have the answers, we only have them most of the time :)

And what about 3d sprites?

As far as I know, there's no such thing as 3D sprites.  The term 'sprite' refers to a 2D image.  You'll need to clarify that last question.

I'm sorry... I definately worded my response poorly.  Sprites are, by definition, 2D.  I meant that if your "characters" (or whatever you're using sprites for) were 3D you could mathematically generate shadows.  With 2D sprites you cannot do that unless you do as I said in my previous post.