I haven't actually tried this yet but I recall Lee saying that multi textured entities were now supported in v109 so leaving the terrain .fpe texture field blank should work if the terrain editor does not allow exporting to a single texture.
Any textures generated by the terrain editor would need to be converted to .dds if they cannot be exported in that format natively.
With T.ED its possible to create a single texture for a terrain providing its not too big which is ideal for the FPSC map editor grid size. Also the terrain can be made static which allows for lightmapping and better collision.
The terrain pictured in my email above has 100% working player collision and enemy collision works with the ground but they walk through the sides of the mesh where there are slopes.
Feel free to download it here to check out the files.
http://forum.thegamecreators.com/?m=forum_view&t=100284&b=24
I recommend placing the entity on the bottom left map editor grid square on level 7 so the water level can be adjusted correctly.
