Thank you for the response Kartoffel.

I can confirm what you said about 8192x8192, when i upped the skin size to that size, there was literally no improvement in detail or resolution over 4096x4096 - so it would seem 4096x4096 is the recommended maximum at the very least.

The reason im using such huge skins is because I am indeed making some very large terrains, and if i use, say, 2048x2048 skin size, the textures come out stretched and blurry. 4096x4096 is the smallest i can go and have the textures turn out decently.