I currently am trying to mask some sprites. Rather than explaining it in words, I've made up some example pictures:

The area to mask (in white)

Now, the red sprite that needs to be cropped.

The final result.

Now, I'm aware that in XNA you can do two things to accomplish this:

1. Use the Stencil Buffer.
2. Use a Pixel Shader.

I have tried to do a pixel shader, which essentially did this:

float4 main(float2 texCoord : TEXCOORD0) : COLOR0
{
    float4 tex = tex2D(BaseTexture, texCoord);
    float4 bitMask = tex2D(MaskTexture, texCoord);

    if (bitMask.a > 0)
    { 
        return float4(tex.r, tex.g, tex.b, tex.a);
    }
    else
    {
        return float4(0, 0, 0, 0);
    }
}

This seems to crop the images (albeit, not correct once the image starts to move), but my problem is that the images are constantly moving (they aren't static), so this cropping needs to be dynamic.

Is there a way I could alter the shader code to take into account it's position?

Alternatively, I've read about using the Stencil Buffer, but most of the samples seem to hinge on using a rendertarget, which I really don't want to do. (I'm already using 3 or 4 for the rest of the game, and adding another one on top of it seems overkill)

The only tutorial I've found that doesn't use Rendertargets is one from Shawn Hargreaves' blog over here. The issue with that one, though is that it's for XNA 3.1, and doesn't seem to translate well to XNA 4.0.

It seems to me that the pixel shader is the way to go, but I'm unsure of how to get the positioning correct. I believe I would have to change my onscreen coordinates (something like 500, 500) to be between 0 and 1 for the shader coordinates. My only problem is trying to work out how to correctly use the transformed coordinates.

Thanks in advance for any help!