Texture is 1024x1024 and looks good. Only problem is:
Yeah it looks really bad when you apply it to the terrain via the brush tool. So I need to look into editing the scale of the thing.
You may also notice that I have dug out a trench for the lava to go into. That lava now is just a place holder as far as I am concerned. I tried putting the lava in a number of different ways and they all looked terrible. So now we are going to build a bunch of meshes so that the lava will flow in the trench. Its been a pretty fail week so yeah not good.