One of the more difficult parts of vanilla SMW hacking is sprite memory and limitations management, especially if you plan to use multiple "interactive" sprites like the variety of platform types. I believe some patches have been made to either negate or mitigate sprite memory limits but in vanilla SMW you have to be very careful and make sure to choose the proper sprite data header. Of course, if you're totally new to SMW hacking, you probably don't even know what or where it is or how to read it so you know what you're choosing. I know it's a little late to be giving tutorials for this contest but if anyone remains interested in making more SMW levels, here's how to read and change the sprite data header.
Sprite Memory is accessed through the Lakitu head button on the toolbar. The following comes from Lunar Magic's Help File (which you should definitely read if you haven't before since it contains an enormous amount of information for all its functions).
Level Menu : Change Properties in Sprite header
The dialog you get from this menu will let you change the options in the sprite data header.
The drop-down list referred to as the Sprite Memory list (formerly called "Sprite Display 1" in older versions of Lunar Magic) controls how memory is allocated for the sprites. This list doesn't show the actual memory requirements of each sprite and the memory allocation setup of each list index, due to the complexity involved. If you have problems where the sprites in Lunar Magic look fine, but in the ROM portions of sprites are becoming invisible or "morph" completely into other sprites on the screen, it means you need to change this setting. There's actually only 0x13 possible settings, so just play with it a bit.
What this drop-down list does show however is the memory index range of each selection... and from this it can determine the maximum number of allowed sprites that the ROM will render on the screen at once (this is the M value). The SP value lists 2 sprites that are given "special" treatment... these are usually sprites that take up a larger than normal amount of memory like a Big Boo, Banzai Bill, etc. A value of FF for one of the SP values means the value isn’t used. The M1 and M2 values describe the range and maximum number of allowed sprites per screen for the two "special" SP sprites. These max values are usually separate from the M1 normal sprite max, unless of course the ranges overlap.
For an example of how to read this data, take a look at Level 105, which uses sprite index 04. With the index used in this setup, a maximum of 7 sprites are allowed on the screen at once, in addition to one "special" sprite which can be either sprite 60 (...?) or sprite 9F (Banzai Bill).
So using the help file, you're able to read these sprite data headers. For our level we used Banzai Bills, requiring us to choose a sprite data header that could accommodate it since it uses a larger than normal amount of sprite memory. Thankfully, the data header used in Level 105, Yoshi's Island 1, matches our needed perfectly. The only downside to using Banzai bills and their associated data headers is that the maximum number of sprites available at once on screen is limited in comparison to other headers. As you can see in the second image, the M value for header 04 is 7, meaning a 7-sprite maximum. In header 00, the M value is A, meaning you can have 10 sprites. This means that many levels use header 00 since it offers the most flexibility when not using special large sprites.
There are a few more headers that are cut off in the second image. Fishin' Boo has a header just for him, as does the Dolphin Generator. There's even a unique one that allows two Banzai Bills on screen at the same time. Normally it's used for the large green gas bubble but the Banzai Bills are allowed in that header too. Learning to read the sprite header can allow some interesting level design based around the larger sprites SMW offers.