The Canvas class was an idea by one of our community developers who has since gone on to other projects, and you’re right–it was never completed. But it was just meant to be a convenience tool; there are many other ways to draw directly into a Texture object. PNMWriter is one such way. Other people have done other approaches. They all have benefits and drawbacks. Try searching the forums for more ideas.
There actually is a tool that can bake multiple texture stages together into one, it’s called the MultitexReducer. I’m not sure I can recommend its use right now, though–it’s got a few issues, including a known memory leak. If you use it only occasionally it would probably be OK, but it’s probably not great for a paintball game.
But for paintball, you only need to make splats onto a texture, and splats are easy to do procedurally, just by directly manipulating pixels. You don’t need to get all sophisticated. Have you seen my Tagger game?
You don’t need to apply paint onto all the textures of your level. Just put a transparent texture on top of everything else, and apply paint onto that one texture. Of course, it all depends on the details of how your levels are set up.
Layering planes on front of your surfaces may also be a viable approach. There are plenty of tricks you can play with the depth buffer to make things always render on top. Again, it depends on the details of your level.
David