Just here to add a side note that may be of use:
Texture baking (What GameSpace can do) is not neccessarily an effective approach for larger objects (ie worlds) as say lightmapping.
Texture baking will create the net result of your diffuse texture and the light effect and create a new image from that, the problems being:
(1) You now have a seperate image for almost every face - Jumbo-file size country...
(2) No more tiled UV - Texture baking a tiled UV map would have to create an image for the entire face as a whole
Lightmapping (Although I am new to this) I think is the better approach. It needs a duplicate of the model and some use of alphablending I think, but a lot more efficient on the whole.
I'm also curious as to where these free programs which do texture blending and heightmaps are. Anyone got some links?

[EDIT] Just found Hamish's sig ...
http://www.dbforums.co.uk/~hamish/. Multiscape looks promising
Cheers
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