Awesome battle, I just looked at it today. I now have two going at once, and it seems Fluesopp likes to do my work for me. The only damage I've done to him has been in his own posts. Not that I mind, of course.
I generally start things out that way; description of the environment, whether it's through a straight description (like I did with our battle) or gradually throughout a single post (which you will probably be seeing more of in my future battles). In any case, I'd try to get it out towards the beginning.
May I make a recommendation for your current battle? Well, I will anyway. Exposition and description. Describe the area you're fighting in more and things like that. Works nicely.
As for me, I'm still looking for another battle. I'd like this one to be set up, though, with a more planned-out storyline.
Hah! I can see how it would give you that answer, actually. Of course, that means that Babelfish's translator thing is not very good, considering that it would be considered bad grammar if you were trying to say "It can call, still is." Me>Babelfish.
