do you have ne idea how this was accomplished
Yes, I did it a few months ago
In essence what you have to do is:
1) split your model into seperate animated and static mesh models, the static section now becomes the main ship mesh.
2) add the animated mesh to the main ship mesh using the particle system
3) align the axis of rotation using a transform matrix
4) change the pixel shader of the animated mesh to use the same as the main ship mesh
The closest in game example of this working is the green skull you see above the pirate base and the pirate ships with their torches and flags.