1) If you want to be able to link the XML data to the GE, yes.
You can create GEs that don't use external data files but, if you do that, you will not be able to edit your GE in WED.

2) How much do you know about C++?
Components (CMPs) are classes (function+data) that share a single interface (get, set, act, update).

3) Download the dll source code and the documentation.

Once you get it to compile on your PC, add a new folder to the "Components" folder (e.g. "MyCmp"). Create a new class in this folder (e.g. "CCmpMy") that inherits from CCmp.

You will also need to add a new enum for this class (e.g. "kCmpMy") to cmpEnum.h and modify the following functions to include it:

eCmp string_to_eCmp(const char* str); // (in ack.cpp)
CCmp* CCmp::create_cmp(CGameEntity* pGE, eCmp type); // (in cmp.cpp)

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