what would be an optimal images size in pixels for the quad, 256X512 ? and would it be easier on frame rates with a .png versus .rgb?
Cloud texture sheets containing multiple clouds are typically 1024x1024, so 512xsomething seems quite enough, all else is probably an overkill. For weather we always use *.rgb textures because they load faster - once loaded into GPU memory, there is no framerate difference, but weather cycles a lot of stuff in and out of GPU memory.
The textures are extracted from the images, completely de-saturated and then using the light curves to get the background to black onto which color to alpha is used. A slight halo around the bolt can actually remain and looks cool, but the edges of the sheet need to go to full transparency, so I used eraser around.
The bluish color is added later procedurally.
Here's one of the new textures in action:
(I guess it's really one of the things you need to see in action to fully appreciate... pictures really don't do the impression justice)