We used both on the last game. The 3 way vertex blend shader is actually quite expensive according to our rendering engineer. Diffuse, normal, spec = 9 textures which is costly to render I guess.
Many medium-sized ones. It's included automatically in the generic terrain shader, which can use up to four sets of diffuse/spec/normal. RGB channels let you paint blends for each of the 3 layers, on top of the fourth. Pretty basic, but works great. Usually projected decals are used when the terrain has uniform UVs, so the…