Megapol Stun Grenade
Used and marketed by Megapol as an effective non-lethal weapon, the Stun Grenade provides X-COM with a way to capture live aliens for vital research. The gas that the grenade releases will stun any persons who remain in the cloud too long. Aliens caught in the cloud will attempt to escape before being stunned. The gas is not affected by Personal Disruptor Shields(which will block the Stun Grapple), so Stun Grenades are the only practical way to capture shields before toxins are developed. Its fast acting agents and environmental friendliness make Stun Grenades an excellent auxiliary weapon for all your agents.
In turn-based mode the gas cloud will easily knock out Anthropod clusters before they fire, and often stun Brainsuckers after they hatch. It is a safe option for building up a stun level on Multiworms, so that they won't break open and release their Hyperworm offspring. The gas does block vision, causing confusion among alien clusters and increasing their time lingering inside the cloud. The cloud is effectively cleared out by the next turn.
In real time mode Stun Grenades are somewhat less effective, as aliens can far more easily escape the gas cloud. Carpet the area with multiple Stun Grenades or use it on choke points to prevent escape.
Stun grenades can be used to save agents on both game settings by dropping the gas cloud at their feet and knocking themselves out. Stunned agents will be ignored by hostiles and Brainsuckers will fail in their attacks. The armor on unconscious units remains functional, so the area can be safely cleared of threats.
Note that stun damage cannot be increased above 255, so Multiworms and other high-health enemies will need to be damaged in order to be knocked unconscious by any method. Note also that Micronoid Aggregates are totally immune to Stun Grenades.
To arm, left-click on the grenade and set the time delay. Note, however, that the timer begins as soon as the grenade leaves the agent's hand: on the shortest fuse, the grenade explodes in his face! Also note that the timer cannot be stopped after throwing/dropping, even if an agent picks up the grenade. To detonate the grenade on impact, right-click on it and throw.
"The Stun Grenade can be used to stun targets within a small area for a brief time. Larger Aliens may need weakening before they can be stunned."
A bug in turn based mode causes stun damage to be calculated from full TUs, rather than the amount of TUs spent in the cloud. This means that agents with full TU bars take little stun damage, but spending their last few TUs will almost immediately knock them out. This effect can be minimized by making a single move action out of the cloud, or maximized by shooting with your last TUs.
Apparently, the Stun Grenade was initially meant to be more of a flashbang than a stun gas grenade. The Rookies Guide has the following description: "This stun grenade provides a blinding flash that can temporarily stun or blind nearby targets.".