How do I make sprites?

Probably a dumb question, but how do I make sprites in 3DS Max 4? When I say sprites I mean like the orb ontop of the priest's staff (it is 2D, but it always seems to face you).

2 Things.

1) Isnt a sprite a 2d game character such as mario/and old NES/SNES/GB/GBA/etc game a sprite?

2) I could have sworn its 3d, from what I remember (ingame), but Im not sure since I can only use 3dsmax 6 (no modling for me :( )

1) Yeah. Those are sprites.
2)No, it is definitely a 2D object. You can see it if you zoom close enough.

It is planes with a texture on it that is assigned to a bone that has billboard.

The orb i mean.

A bone? I never use bones for a sprite.

when u say sprite i assume that its at least slightly 3d too, like it has 2 planes that are perpendicular, and it shows the picture on every side, so that it will be a sprite in ANY direction (the planes make an X) this would make it so that if there are multiple players w/ different camera angles looking at it they would see the orb to.... or maybe im wrong and it will show up on any direction at same time with only just 1 face?

In anycase this sounds very interesting, could make some semi-nice trees for rpgs this way..... hell most games been using sprites for trees forever... and they would be MUCH smaller to import :P

EDIT: on my 2 plane X configuration, it would be 8 polys instead of 2... i guess thats a pretty substantial difference, if u do it a lot. so it would be good if the way u guys do it is 2 poly, not the X, however if only one player will see orb, well he-ll ill waste 6 polys per sprite....

i've always understood a sprite to be a 2d object and given that, it seems to fit into this category very well.
from art tool docs:

Billboard – A billboard is a piece of geometry that is procedurally oriented to face the camera. Fully billboarded objects will always
face the camera in the same orientation. Objects that are only billboarded on one or more axes will face the camera on those axes, but
may rotate around other axes.

specify this property to an object with the 'user property editor' in the utilities rollout.

the cross over transparency method mentioned above is a bit of a hack compared to the billboarding method described below. a hack but still a good one ( esp for 8 poly trees) :-)