I was able to repeat what you described. I'm running Vue 5.06-02, build 276828. PC Win2k, pentium 4. The other thing I noticed that seemed odd was.. immediately after loading your texture through the Material editor, I tried changing the "Type" to simple, but it wouldn't accept it. When I clicked on the type, "simple material", the bead jumped back to "mixed material" on its own. The second time I clicked simple it accepted it. One other thing. I could only reproduce your bug by right clicking the material nodes, and choosing "edit material" each time until I got to level 4. If I doubled clicked the material previews to get to level 4, the level 1 node would still have the "simple blend" option set when I navigated back.