Terragen Itself
Caveat Emptor: I am not in a position to provide a full and complete tutorial on how Terragen works and how to use it under all circumstances. There already exist several excellent and extensive tutorials on what this program is, how it operates and how to use it to your advantage. Go to either the homesite, http://www.planetside.co.uk/, for the official users guide, where you can also pick up the program itself, or to http://www.terrasource.net/ for a resource center on all things Terragen and an excellent third party tutorial www.soft.net.uk/brooksbank/terratut/, or www.members.home.net/edegiuli/TGtut/TerragenTutMain.htm, which is a little simpler. This site will also point you to the source for the necessary plug-in SOPack. (to be discussed later).
As with all things computer related, you will arrive at your own modus operandi. I want to demonstrate how I have used Terragen to render custom textures for our beloved MCM2. I arrived at this process through trial and error, so hopefully this tutorial will save you some of the experimentation and mistakes I suffered through.
I am also providing in zip format all the necessary elements for you to practice learning how to accomplish what I will describe below: all for my track RedRox, the terrain (or dispmap), the Terragen World (which will contain all the info necessary to render a custom texture: camera angles, surface colors, atmospheric conditions, sun angles, shadow generation), and the "placement maps" SOPack needs to use to render a track surface, with ruts!
Change your thinking: Terragen creates surface texture as a FUNCTION of your dispmap, completely DEPENDENT on the slopes, heights, twists and turns of said map. That is to say, where it is steep, I have rocks, where it’s flat I have dirt, on the valley floor is sand and grass and on the mountain top is snow, except where it is steep and there’s granite peeking through.
Set-Up
Terragen comes to you the consumer in a pretty simple format. That is to say, the whole thing is contained in one folder. To organize things, I create a series of sub-folders as illustrated below. Atmospheres, Plug-ins, SOPack, Surfaces, Worlds, and Terrains can thus be saved and accessed in a rational manner.

Below is an illustration of Terragen basically all set to render an orthographic projection. What is that? A satellite view that will create the 960x960 overhead image we need to import into Armadillo as the custom texture. But why does this say the size is 2500x2500? By making a huge image and re-sizing it down to 960, the quality is exponentially better for our finished product.
I have imported my terrain, and built my Surface Map texture tree, as well as all the other fiddling with atmosphere, sun position, shadow generation, etc required to make a sensible looking texture map.
Note closely the numbers and position of sliders and boxes and circles checked and not checked in the Rendering Control window. Vital to your success.
SOPack the Track
Here is the Jesus pin, the key to this whole thing. You have already found and installed the SOPack plug-in, now it is time to use it. But for what? Allow me to digress. You guys know how to use probability maps in Armadillo to place trees in certain places and not in others. White is where trees will be, and black is where they won’t be. SOPack will allow us to use that EXACT SAME CONCEPT to render a track surface that is separate and distinct from the off track surface. However you want to do it, paint a white on black .bmp image of exactly where on your dispmap the track runs. Blur it or sharpen it to your hearts content. See the next section, Rendering, for examples of a base render, its transformation into a track map, and further into a ruts map.
Now we are ready to set up Terragen to render an image which has a clearly defined track surface. As pictured below, Edit the base color of your track surface (I usually use black). In the Edit window, click the little Tex button on the Advanced Distribution card file:
Which will bring up this dialogue. Click the plus sign:

Which brings up this option. Click the blue line "Surface Distribution Version", then OK.

Which brings up this dialogue. Click the "Transparent" button, then OK.

Select your "probability" (more accurately exact placement) black and white map and SOPack will do the rest:

See the funny looking b/w track map in this window? Terragen can now render an image that has separate "painting" for the on and off track textures.

What is going on next? Ruts my friend, ruts. Same routine and principle as above, different "probability" map. Here is the deal. Take your track base map, soften it way up, and paint a bunch of jet black lines on the track. Voila: ruts.
Here is another deal. For painting the track base, I start with a glass smooth black, and start layering over that the colors I want the ruts to be. For the ruts map, this is where I layer my colors to create the visible track surface. The black lines we cut in this map are where the dark colors of the track base will show through as ruts.

And here it is, in preview, a complete, overhead, rendered image of a greater off track world, with a distinct and visible track surface squiggling around the square.
Rendering
OK, now we start. In Terragen, I rendered this very simple custom texture of my track, using one color, and opened it in Photoshop.

Very simple operation to paint in white the track surface, select the inverse from that and fill in black. Leaving you with this image, which will be used by Terragen to place specific colors only where the track exists. Blur (highly suggested) and modify to your hearts content.

Here is the ruts map. You have probably noticed the similarity with the above. The important difference is the softness or opacity of the white track map and the jet black lines cut in specifically for the ruts to appear in the final rendering. (Note that SOPack requires a .bmp image to do its thing. This picture was taken before I flattened the image)

Which we see here:

This is the image I will re-size and import into Armadillo as my custom texture. The crowds will now cheer.
Tips and Tricks
Always start your base layer glass smooth, this leaves you more control over succeeding layers in terms of bumpiness (or texture) and therefore final appearance.
Go A LOT lighter on the shadow stuff than you would think, and Terragen will render perfect shadows as part of the final image.
To do this, the sun obviously cannot be directly overhead.
Try to blur only the edges of the Trak Base as this will make it fade naturally and realistically into the surrounding off track surfaces.
Go easy on the bumpiness slider, it can and will make your surface texture look like a diseased leopard if you use it too much.
In order to render images larger than 960x960, you will have to purchase the registered version.
Alert! Should you find yourself rendering rather large images, be aware that this can take A LOT of time, like up to three hours. It does work in the background though. The reward is custom textures that are without parallel in our community.
If anyone knows how to get rid of the "film grain" that one sees in MCM2, stand up! I’d be delighted to learn as well.
I’d be delighted to answer questions: zola@madriver.com