Yes, there is no "SKY" in lite-C, and for files you must use "" and not <>.

Why dont you look in the manual? The example for a sky entity is:

Code:
ENTITY* skycube =
{
  type = "skycube+6.tga"; // the image for a backdrop scene
  flags2 = SKY | CUBE | VISIBLE; // sky cube, visible
}

or

ENTITY* skycube =
{
  type = "clouds.tga";
  flags2 = SKY | DOME | VISIBLE;
}