It's sometimes it's a big help if you run objs through PoserRay to get them ready for TG2. Here's the instructions I saved that Harvey Birdman was so very kind to share with us. Hope he doesn't mind my posting back here to help someone. Thanks Dave! Anyway here's the process he used.
1) Preparing obj's in PoseRay for use in TG2 From Harvey Birdman (Dave)
2) Open the png textures in an image editor which does not show any blocky artifacts around the leaf edges. (If you see them you'll know what I mean; if you don't, don't worry about it.) Create separate 24-bit .bmp or .jpg images for the leaf color and alpha maps. If the bark .png image is 24 bit (I think a couple were 32 bit) it can probably be used as is, otherwise convert it to a 24-bit .bmp or .jpg image. Place these textures in the same directory as the original obj.
3) Load the original obj into PoseRay. Examine the 'Material's and 'Groups' lists. I like to have at least a 1:1 relationship between groups and materials. If there isn't, select the 'Materials' tab and click the 'Rearrange' button. Select 'Groups->Materials'. Click 'OK' when asked if you're sure. (Some models have less than a 1:1 ratio, some have more. The Silver Maple, in particular, has separate material groups set up for different groups of branches.)
4)Select Materials/UV. Set remap method to Cylindrical, Z axis = 1, X and Y = 0. Check 'Weld UV Coordinates'. Select the trunk group and click 'Update'. Repeat for level 1, 2 and 3 branches, as applicable (Some groups may already have valid coordinates. Alternatively, you could skip texture coordinates on the smaller branch groups (the highest numbered groups), and assign a diffuse color to the material. This will result in a smaller final .obj.) The leaves should already have UV coordinates - don't disturb these.
5) Select the 'Basic texture properties' tab. For the 'leaf' material, select the color and alpha maps you created at the beginning as the pigment and transparency maps. Uncheck the 'metallic' checkbox. For the trunk and branch groups, select the bark texture as the pigment and bump maps, and set the bump size to .01. Uncheck the 'metallic' checkbox. (You may also want to assign diffuse colors to the leaves and bark groups. This can optionally be done later, in TG2.) After modifying all the materials, click 'Update'.
6) Select 'Groups'. Click 'Options' and make sure 'Reset camera...' is checked. If the object has Z as the up axis (it probably is), check the 'Flip Y-Z Axis' button. Check 'Weld vertices', then uncheck 'Calculate Normals'. Click 'Update'.
7) Select the 'Obj Output' tab. Make sure 'Save Normals' and 'Save texture coordinates' checkboxes are checked, but not the other two. Enter the desired name into the 'Modified obj file' textbox, then click 'Save'. Make sure the 'Include file paths...' and 'Copy all maps...' are unchecked. (The textures should already be in the same directory, right?) Click 'OK'. (Make sure the name you give the new obj doesn't have any spaces in it. TG2 may not like spaces in the names.)
8 ) Import the obj into TG2, selecting 'NO' when asked if the object is from XFrog. you will have to re-specify the alpha texture for the leaves and the bump (now displacement) texture for the bark. Render the tree beside a 1-meter radius sphere. (Set the sphere location so it's sitting on the ground beside the tree.) Note any scaling discrepancy. At this point you have two options. You can either re-scale the tree every time you use it, or you can go back to PoseRay, scale it there and re-export it. To re-scale it once, open the new modified obj in PoseRay. Select the 'Groups' tab. MAKE SURE NO CHECKBOXES ARE CHECKED, AND THAT 'NO AXIS FLIP' IS SELECTED. Enter the desired scaling factors in the appropriate textboxes and click 'Update'. Re-export the obj. Import it into TG2 again (again re-specifying the alpha and displacement textures), and this time set the multishader and component shader names to something more appropriate than the defaults. Export the obj into a tgo and you should be all set.