Id go with tga.

Id also suggest using a muti texture shader. I thought I replied to this thread but guess i didnt

Does the entire texture distort/blur or only areas that are on extreme slopes?

Also have you scaled your terrain up at all?

I think both will lead to distorted textures. Imagine a 512x512 texture blown up to 2048x2048 it will distort alot of the image. Best to go with the muti texture shader I think. As said theres a few on the wiki. I also beleive the new templates has a multi texture shader.

http://www.freewebs.com/otama_syndicate/index.htm - Each master to his own technique.

- Not me said the bee, Nor I said the fly.