Well this obviously isn't going anywhere. Vue just doesn't have the capability to produce a simple path in a terrain. I just wasted all day on this with no success.

Here's the settings

• used "User" render settings
• increased the Advance Effects slider.
• made river image map larger as per Rutra's recommendation (4800 x 4800)
• made image 16 bit
• made terrain 1024 x 1024 resolution
• used "Procedural" terrain
• saved as .png (lossless)
• made the terrain walls sloped and less steep

I have used Vue for 3 versions but this may be my last version. Really disappointed.