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Well, I am new to daemons... and have no idea what a, let's say for example, Pink Horror Champion does. Is it just for show? Is it an upgrade? What is it, and what does it do?
Do you mean the model in the box or the actual unit upgrade in the book? For the first, they look pretty. For the latter, they mark which model's have the specific power. Daemons don't have champions/sergeants per se, but they can take a "special" daemon that has Rending/Unholy Might/Bolt of Tzeentch/etc. In this case, that's what those models are there to show.
That's except for the Changeling/Karanak. They are special upgrades to squads with their own ability noted in the book. Also, the Changeling does not replace the horror with a bolt for the squad.
I'd go one further than Tayne (and he is right on everything he said), Daemons are allowed 2 greater HQ choices or you can trade in one greater HQ choice for 2 lesser HQ choices. IF you trade both of the greater HQ choices, you could have up to 4 lesser HQ choices. The lesser HQ's like Heralds, Skulltaker, Masque etc, can be used like a champion to lead your units. Heralds usually are just like the troop choices only tricked out in Daemonic Gifts. For example; you have a group of 5 Plaguebearers and they are lead by a Herald of Nurgle. You can just nominate a distinct looking Plaguebearer to be your Herald. That Herald has 6 Daemonic Gifts available to him to use to make him a "Super Plaguebearer". Some of the best values in the game are these Heralds, especially Chariots of Tzeentch or TzChariots. These things are nasty, cheap and a must have for many lists.
Daemonic unit champions are a fantasy thing honestly and they even give them special names! (a Pink Horror champ for example is called an Iridescent Horror, while a Bloodletter champ is known as a Bloodreaper, etc...)
As mentioned above, in 40k you can use those champion bitz in one of two ways;
- to mark out which model has a squad upgrade like Bolt of Tzeentch or Noxious Touch for example.
- to use as Daemonic Heralds who are an HQ choice.
Personally, I went with the former option because it makes it easier to play my army in both 40k & Fantasy. I converted my heralds instead from various other models to make them *really* stand out from their lackies!