There are some limitations with using texture atlases compared to normal textures. First of all, all texture coordinates must initially be within 0..1 range. So for example, no “free” tiling can be used. The other problem is bleeding between tiles in the atlas when doing filtering, for example when using mipmaps.

Some additional information from Ivan-Assen Ivanov, author of article [2].

” – separate textures hurts not only batching (in facts, it hurts batching less than years ago), but also memory – as there is a certain per-texture overhead. This is especially painful on consoles – on PCs, the overhead is still there, I guess, but the driver hides it from you. The exact numbers are under NDA, of course, but on an old, unreleased project, we saved about 9 MB by atlas-sing a category of textures we didn’t atlas before.

- vertex interpolators are expensive! make sure you measure the remapping from 0..1 to the actual UVs in the atlas both in the vertex and in the pixel shader. Sounds counterintuitive, but on modern GPUs and with dense geometry, pixel shader is actually faster.” 

[1] “Improve Batching Using Texture Atlases” http://http.download.nvidia.com/developer/NVTextureSuite/Atlas_Tools/Texture_Atlas_Whitepaper.pdf

[2] “Practical Texture Atlases” (borrowed image from this page)
http://www.gamasutra.com/features/20060126/ivanov_01.shtml

[3] “Batch, Batch, Batch: What Does It Really Mean?”
http://developer.nvidia.com/docs/io/8230/batchbatchbatch.pdf

The aim with soft particles is to remove the ugly artifact that appears when the particle quad intersects the scene. There are a lot of different approaches to solve this, some more complicate than others. The simplest formula for soft particles is to just fade the particle if it’s getting to close to the scene. To do this, the scene without particles has to be rendered first and the depth saved in a texture. When drawing the particles, the depth of the particle will be compared to the scene depth. The alpha should be increased by a smooth fade by this depth difference. The formula below in HLSL is the simplest possible for soft particles, and works very well. Scene_depth is the sampled depth (in viewspace) of the scene in the direction of the current pixel. Particle_depth is the depth(in viewspace) of the current particle pixel. Scale is used to control the “softness” of the intersection between particles and scene:

fade = saturate((scene_depth – particle_depth) * scale);

NVIDIA [1] proposes a method that the following fade should be used instead of the linear one described above, to make the fade even smoother.

float Output = 0.5*pow(saturate(2*(( Input > 0.5) ? 1-Input : Input)), ContrastPower);
Output = ( Input > 0.5) ? 1-Output : Output;

Umenhoffer [2] proposes a method called spherical billboards to deal with these problems. In this method, the volume is approximated by a sphere. This method also deals with the near clipplane problem that particles will instantly disappear if they get to close to the camera.

There is also an idea [3] that the alpha channel can be used to represent the density of the particles. Although this method has the drawback that the textures might need to be redone by the artists.

The method by Microsoft [4] uses a combination of spherical billboards and a texture representation of the volume. But instead of using the alpha channel, they ray march the sphere and sample the density and volume from a 3D noise texture. The result can be seen in the image below.

The video below shows how soft shadows can increase realism in games using large particles. It’s originally an ad for Torque 3D engine.

[1] Soft Particles by NVIDIA
http://developer.download.nvidia.com/whitepapers/2007/SDK10/SoftParticles_hi.pdf

[2] Spherical Billboards and their Application to Rendering Explosions
http://www.iit.bme.hu/~szirmay/firesmoke.pdf

[3] A Gamasutra article about soft particles
http://www.gamasutra.com/view/feature/3680/a_more_accurate_volumetric_.php

[4] A DirectX 10 implementation of soft particles by Microsoft, called Volumetric Particles
http://msdn.microsoft.com/en-us/library/bb172449(VS.85).aspx

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Here’s the full article for free (also the source for the image). Or you could buy the great book “GPU Gems 1″ which also contains the article.
http://http.developer.nvidia.com/GPUGems/gpugems_ch07.html

An implementation of the grass rendering by Nvidia:
http://developer.nvidia.com/object/nature_scene.html

All details can be found in this paper by Nvidia.
http://developer.download.nvidia.com/presentations/2007/gdc/RealTimeFluids.pdf