I had posted this for CopperCircle last week, but its gone now...
First, unpack the shaders.pak, and change the mesh.vert to include these lines:
#ifdef LW_BILLBOARD
vertexcameraposition = (gl_ModelViewProjectionMatrix * mat[3]) + vec4(gl_Vertex.x,gl_Vertex.y*(buffersize.x/buffersize.y),0.0,0.0);
#endif
Place them after the sway if-defined statement right after the vertexcameraposition and before the textcoord0 statements:
Here is an example billboard that you can drop in the editor:
Note: Make sure you only have one mesh.vert inside your SDK or you cannot guarantee what file the engine will grab using the abstract file method.