VolumeCloud is a material shader available in all Source games. It takes three input materials and creates a cloud effect. It can be applied to models, and requires further testing for compatibility with proxies and parameters.
As the shader is intended to simulate moving cloud cover it does not receive shadows. The effect works best with mostly white, transparent noise but also works with non-transparent textures.
The various texture layers all rotate counter clockwise around the "center" of the UV map. Each layer has additive blending on the others, which allows the depth effect to look seamless with white clouds that layer upon each-other. All three base textures are required to be defined, each one in the sequence rotating at a lower speed.
To do: Are "VolumeCloud" and "VolumeClouds" (the second one is found in Episode Two materials) shaders serve the same purpose ?