Hehe, that's why it's been festering for so long, it should really have a tutorial thing to go along with it. I shall see what I can do about adding more comments or making a document up explaining it all.
I was thinking yesterday that vertice colouring is very much underused - that's how it manages the smoth corners on the road, it's a special transparency mode that works in 1-bit, but still blends to make the curve. With vert colouring it would be possible to project curves over polygons, like if you had a really low polygon car and wanted nice smooth wheel recesses, you could get a very smooth curved hole with just a few polygons, and it'd look like you'd spent hundreds of polys on it. Cars are a good example because the bodywork can be a single mesh, which is ideal for this sort of thing as memblocks only really like single mesh objects. That's all this demo is, just some little alpha coloured chunks of terrain with different textures to make up patches of detail.
The download seems fire here, perhaps it got interupted and is conflicting with it's own file - I'd suggest doing a search on your hard disk for ATD_Roads.zip and deleting it then trying again.
Van-B