You can do it in this way:
include the mtlFX.c in your project. Then you have to allocate the action fx_terraintex to your terrain. The terrain should have some textures with alphachannel. A texture size with 512x512 pixels is very good for this!! You can also set the detail_size variable in your code to set the texture resolution.
And one thing.. every texture needs one renderpass. Many textures can kill the framerate. just try a little bit out.;) Make the texture size small as possible. I am using 256x256 pixels for my terraintextures.