Hi Roland,
I extracted a small test route using a mixture of 10 metre and 5 metre terrain with the orthoimages painted onto the terrain. The result is shown below. The 10m terrain is the part on the upper hillside and produces pretty clear images. The 5m terrain on the lower hillside produces an ugly blotchy mess.
Flying over the terrain on that hillside and then returning to the starting point seems to cause the textures to display much better in the image below, but the effect is temporary and moving away from this location and returning or exiting TANE and restarting returns the view to the blotchy displayed textures.
Someone over at the Trainz Forum said that you are familiar with this issue. If you are, can you explain what is going on and if there is any way to have the textures display as shown in the lower image rather than the upper image?