Technical bits: The chalk adds a slight random variation to the hue of the applied colour (and also to the reflectivity if its metalic) to make it feel vaguely dusty.
The crayon's softness setting affect its opacity (hard crayons tend to be more transparent), its lumpiness (soft crayons 'blob' a bit more onto the paper), and how much it smears existing colour when you're using softer pressure (hard crayons smear further and more uniformly than soft crayons).
This is a typical example of how ArtRage hides many parameters behind one control. While we could expose all those parameters for the crayon, only a very few combinations of settings would produce useful tools. And it would have to be the right combinations of all those settings.
While I'll admit we might well be missing some really interesting tool abilities by not allowing you to explore all those combinations, we are instead providing (what we consider to be) a tool that is useful and realistic through the whole range of its 'softness' setting.
AndyRage's mantra for graphics engine code:
"Sure - how hard can it be?"