Got this working and it is cool - I had some issues building the model correctly - here is how I got it going. Import the bmp into med to creat a HMP terrain- import a tileable texture (say 256x256), add skin, import second tileable texture, add skin, import larger TGA (512x,or...)with an alpha channel, do not adapt skin points. Watch your skin numbers, adding a skin does not take you to that skin.

should you add mimaps for the tileable skins??

here is a screen shot



added some trees and a skycube. What would make this alot better is shadows on the ground. It seems like using a luminance map or multiplying blend mode image with the non-alpha part of the tga image with alpha is a natural place to start any help would be greatly appreciated!

Thx for the awesome shader!