Pedro's ForzaToolz Release 2
http://forums.xbox-scene.com/index.php?showtopic=408798

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ForzaBINDump:

Description:
ForzaBINDump extracts the decal and vinyl images from a copy of the XBOX Forza Motorsport game's decals.bin file, originally located in the game's \media\ folder.  It stores the extracted images as TGA format graphic files (usable by PS, PSP, etc.).

Usage:
ForzaBINDump <filename.bin>

e.g. ForzaBINDump decals.bin

Version History:
Version 1.5 - Source code tidy up.
Version 1.4 - Now flips decal image itself & tidied up source code.
Version 1.3 - Add dumping of CarRights information.
Version 1.2 - Integrated zLib inflate() library.
Version 1.1 - Added zLib inflate() via zLib1.DLL
Version 1.0 - 1st release.

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ForzaBINPack:

Description:
ForzaBINPack packages TGA format graphic files found in its execution folder into a decals.bin format file, suitable for use by the Forza Motorsport game engine.  Simply rename the existing \media\decals.bin file, and replace with the one produced.

The format of the TGA files is specific.
Decals and Vinyl TGA file have maximum dimensions of 128x128.
Decal TGA files must be 256 colour palettised TGA files with Alpha channel format.
Vinyl TGA files must be greyscale TGA files.

Usage:
ForzaBINPack <out filename.bin>\n";

e.g. ForzaBINPack decals.bin

In practice, it’s best to use ForzaBINDump to create the basic decals images in the right format, then simply edit those.

Known problems:
The tool relies on the user creating the correct format TGA files as input.

I’ve yet to find a tool that can produce “256 colour palettised TGA files with Alpha channel” (aka. RGBA), although the format is a valid TGA format.  Aha-view (see http://www.aha-soft.com/ahaview/tga-viewer.htm) does display such TGA files correctly.  Therefore, for convenience, if no palette alpha channel is present in the input TGA file, the palette alpha channel is automatically populated to “full intensity” to ensure the image is visible (which works fine if you always want to use square decals :-/).

Version History:
Version 1.2 - Fixed bug preventing Ferrari logo appearing.
Version 1.1 - Source code tidy up.
Version 1.0 - 1st release.

Thanks to Angerwound, krash, jackbauer, & Nunim for their assistance and testing.
Thanks to the ForzaCustoms.info team for hosting the utils (http://www.forzacustoms.info/).
And thanks for all the posters on the xbox-scene & forzacustoms.info forums for their encouragement.