No, you remembered correctly, and I'm quite impressed that you did, TechnoGeek.
At one point the manual did indeed say that dimensions need to be specified on a default 24x24 CO if the sprite spans more than one row. I remember, I put it there because the PacMan example didn't work correctly until those dimensions were specified.
The manual was written during KS beta, however, and with the current release it seems that this problem no longer exists, so the manual was updated as well.
Back on topic, I've started working on a rain CO. Looks good so far; it might complement the stormy clouds/lightning CO I've released earlier.