I have a tree model done in xfrog and exported as an .obj model. It was exported with a seperate .mtl file for the textures. Can this .mtl file be applied to the model in Bryce, and if so how ?

Bryce will automatically attempt to load the .MTL with the .OBJ. If the .MTL references an image texture and there's not a complete path to the image Bryce will ask you to locate it. 6.1 doesn't work correctly with solid color (i.e. non-image textures) .MTLs setting all the Diffuse values to .3 and incorrect color conversion (black object bug).

Use Notepad to open the .obj (object) file, you'll usually see references near the top of the file (it's clear text) which point to the .mtl (material) file by way of a material matlib tab. The Material file serves as an external resource definition for various aspects of the material, including ambien, diffuse and speciular coefficients, transparency and images used for texture, bumpmap and more. Some applications will use the information, others may choose to ignore it if they're only interested in the geometry (like if you;re going into an NC milling machine with it for manufacturing a prototype, then it would just use the geometry and convert it to STL triangles for examples).

If things are done right, Bryce will find and use the materials, especially with something like tree foliage and bark textures etc... coming from Xfrog.