First, make a distinction between textures and subtiles. Textures are owned by subtiles, not the other way around.
That drawing is exactly right as far as the overlay/alpha transitions, however the interior designations are misleading in that it implies subtile 0000 goes in the upper left with 030X in the lower right ect. I would have preferred the lable designations 0s0x where 's' is the subtile number and 'x' is the tile family number. What that drawing is really showing is the quadrant numbers, zero to 3, and the 4 character labels are a problem.
The quadrants are filled with the corresponding quadrant from any subtile within the family set, along with that subtile's corresponding texture.
For instance in the Farm set, quadrants in a clockwise direction from quadrant 0, could have subtile 0303, 0003, 0303 and 0003. In other words, quadrant 0 would map quadrant 0 of subtile Farm 0303, and notice quadrant 2 is also from subtile Farm 0303 but using quadrant 2 instead while quadrants 1 and 3 would be mapped from the corresponding quadrants of the designated subtiles. The strongest visual thing you see in the TE is the texture but much more is going on.
Take a look at road0 in the OE and you'll understand that they really are mapped this way, and the geometry of the cell requires it as shown by the fold lines aka slice lines when you turn them on for building terrain tiles.
If you stay with the default ETO set in the TE, you can do some great work with textures alone, but if you want a jungle terrain or desert terrain, you really aren't going to be happy with a fir tree, let alone a spinning windmill on your beautiful desert texture.
Fortunately the OE made modifying subtiles pretty painless and Skuzzy has posted the full source set of .til files for the default ETO set at the top of this forum.
I'm looking forward to what you come up with, and I know you won't stop with textures.
