In Ventilator's multitexturing example he blends oT0 and oT1 in a pixel shader with the alpha value of oT2. But, most computers cannot run pixel shaders. So can 2 textures be blended together through a vertex shader?

Vertex shaders can't blend textures. If pixel shaders are not supported, you can blend textures with the blending operators of the fixed function pipeline, using several passes if required.