Hi BigBen,
Unfortunately, this file doesn't display any textures attached to it properly. They are unusually dark, and it requires you use luminosity (which emits light), rather than diffuse color (which would just reflect ambient light). You can try boosting the diffuse color by increasing the number and this does not resolve the issue with that model. It took me forever to figure this out. There is something wrong with the way its trying to display the image, which is inherent in the model itself.
The obj I posted works perfectly, other than not casting a shadow. But as Sjefen stated, it may be a 1 sided object, or as Matt stated, might even be a bug in TG2.
We definitely need a "working" billboard object (or built in system in TG2 for this). Though I know TG2's popular works nicely with 3D objects, having the ability to use 2D objects opens up even more doors. I know there was mention this might possibly be included in future releases (or at least that was the gist I got).