It randomly picks from like 4 or 5 decals, but it should place them where it's pointing. Also make sure that depth biasing is on (View, Toggle Depth Biasing, I think) or it wont render properly.
Every time you move the arrow (Or ANY other object in the render window for that matter) it would re-place the decal. Not great if you want very specific results, but great if you want to cover a pile of bodies in blood.
