As you probably know there are 7 different tile types – Water, Grass, Grassy Rock, Farm, etc. You are stuck with these 7 types but you can change their colors. So if you where doing a desert terrain, you can make them all sand and rock colors. I have not done it in TE2 but you used to be able to change the objects associated with a tile type. For instance you could remove or switch the trees on the Forest tile.
MachNix