Yes, it's certainly possible. However OBJ is not a very strict "standard" so sometimes there are differences in how one application writes the OBJ or MTL (MTL is the texture definition file), or another one reads them. Do you get any error messages when you try to load them?
MTL files are plain text so you can read them with a text editor. Look especially for what the path statements for the textures look like. Also, of course, make sure your textures are images and not procedural as procedural textures cannot be exchanged between most applications, and certainly not in OBJ format (which deals exclusively with simple material properties like diffuse color, specular, and image-based texture assignments).
In any case, one approach that is sort of a catch-all for any kinds of problems like these is to pass the object through the free PoseRay software. Just load it, then save out as OBJ again (with a new name, ideally, in case something breaks). The resulting output OBJ should be more compatible with Terragen.
https://sites.google.com/site/poseray/- Oshyan
