You should have a texture for the terrain (grass or rock or whatever ) it should have a proper size liek: 128 * 128 or 256 * 256 or 512 * 512 pixels etc.
Then in MED you go to the skin editor and load the texture.

Else have a look at Grimber's site at the tutorials for MED section there sould be something that can help with terrains: http://s91902847.onlinehome.us/6901/13843.html

i gotta make my own texture? i cant just use that grassy one ?

you can, but you gotta locate the file, then in photoshop or paint dupliicate it a few times, else it'll be stretched all over the terrain, than save it and use it in MED