I understand that an environment is a giant plane populated with separate meshes that are efficiently assigned texture maps what I don't understand is how the texture is assigned on the plane that the gamer walks through (the ground). it could be done by effectively assigning, for example, one tiling 1024x1024 texture, but…
http://wiki.polycount.com/Multitexture is this an example of what your talking about, in the end how large would these textures end up being, are these textures combined or are they baked together?
That wiki page is a good starting place. For consoles I'd expect up to 4 different 512x512 textures for most terrains, RAGE did bake down these blended terrain textures into a "megatexture" but that isn't the norm for most game engines. The UDK wiki has more specific examples and how they are used.…