Glad it worked.
Regarding your questions:
1. the hovered icons are nowhere in the page, indeed. I just got an idea of how they can be visualized - I'll try to add it next week.
2. That's probably a bug. I'll look into it.
3. Indeed, there are no capabilities for "exploding" the sprite and colorizing only the desired parts of it. It's a lot of effort, yet it's in the backlog - I hope that we'll get to it at some point.
The tool should be able to handle such files - though it depends on the case.
The biggest benefit from the tool is when you make small tweaks - it's by no means better than a hand-coded stylesheet, but in most cases, it does the trick.
the Telerik team