Hi all.
After seeing lots of questions (and essentially no answers) about texturing terrain, I took it upon myself to re-write the existing Xith3DTerrainTest to use textures. If you look at the source, pay close attention to the way the geo array is built as well as the TerrainShape class. Also, textures from web start jars seem to be problematic on the Mac for whatever reason. If anyone has any input on this, let me know.
UPDATE [Feb 08, 2004] I added a skybox 
Formatted Source
Full Jar
Web Start
http://users.xith.org/mike/Xith3DTerrainTest/ttd_screenshot2.jpg