Sequences are prioritised in order of their index number, so if sequence #1 is active then sequence #2 isn't checked. If sequence #1 is inactive, then sequence #2 is checked and, if active, used. I plan to include a reordering mechanism for them too, I've just not gotten around to it (the dialog that pops up for configuring a sequence will house it - hence why it looks so barren).
Colour fading was actually implemented a while ago, but I removed it for a few reasons (it was about ~300 lines of code and prone to breaking down completely). Might implement it in the future.
On a side note, the next build has some more display actions - Blend (changes the blend mode), Saturation (desaturate/saturate the texture, also available as an option), Texture (change the texture dynamically) and Rotation.
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