I assume you are the dude that emailed me about this? Radiant will never show the true textures for terrain--that's just not the way the Team Arena terrain system works. The terrain entity (really just a func_group) is textured with one texture ("common/terrain")... the compiler does the rest based on your terrain blending .shader definitions and the .pcx alphamap (both of which are defined in the key/value pairs of said terrain entity). You will never see a "true" representation of your terrain's shader blending in the editor, the most you will get is whatever image you defined in common/terrain's qer_editorimage line. If the red and black "shader not found" checkerboard bugs you, feel free to use whatever image you want for qer_editorimage; otherwise, don't sweat it, because it don't mean a damned thing.
Well well...aren't we the professor of mapping. Good to see your ugly mug on the forums man. I don't usually come here much anymore. But I might stop in from time to time. Great tutorials as always rgoer. If anyone should be working for RAVENSOFT or even ID........:D