It's not done using the normal terrain texturing process at all, with this you can use very large texture to add unique details, the image below shows what can be done with only one image, this would be best where you want some really unique none repeating details, the applications are quite wide from melting snow or frost to simply increasing the uniqueness of textures painting in debris, leaves or tank tracks into the ground, With this you can get rid of generic tiling texture look and move past the 8 maximum ground textures limit. You can check the above link for details, thanks!
I put mine to Medium ( I run in OPENGL on Mac) and it worked still, though it did lockup for a good few minutes after I changed settings, dunno if thats just cus it's opengl or my super sized decal lagging it :-/ Once it's done thinking it works fine. hell it even works in Lowest, which is really shouldn't :-D
Be interesting to know how this works on an older GPU with big textures, Ill put out a test example map at some point. Hopefully it degrades gracefully and doesn't just explode :-/
I've been playing w/ this a bit but have one issue. I ended up not actually replacing the textures for already existing decals but created my own w/ my own model. I created the model in photoshop and all it is is a plane w/ the texture as a material. The problem is that I can't get it to uniformly adhere to the terrain. So any kinds of bumps result in the decal being hidden by various objects. I thought I had found a solution by raising the plane up a little on the z-axis but then I realized that units had their feet getting clipped by the new height. I'm sure there is a way to apply custom decals w/ the same kind of uniform results you see in these examples. If anyone has any ideas or helpful hints, please let me know. Thanks!