It's really pretty simple. The terrain editor is nothing much more than a gray-scale picture editor. The picture import part of the terrain editor allows you to bring in an image and then translates the gray scale of that image into a height map. Back to my castle towers ... all I did was take PSP and generate a gray scale image of bricks. Then I brought that into the terrain editor and made a terrain out of the image. The terrain then looked like a brick wall. If I had also made a color image of that brick wall, I could have used that in the materials editor to make a material that matched my terrain and would map to it perfectly. For my towers I just used a procedural texture, but I have done the mapped texture on terrain many times.

Could be worse, could be raining.