Hahaha, well I think first off you are using one of my free textures at 
http://texturesource.org and I believe I uoploaded that at 1024X1024 size right? I kinda forget as it's been a bit.  OK, here is how you get it to work.
1. Bring it in as a shader image like you started to, then go to your panel and change view from camera  to Projection Type: 
Plan Y {edges=XZ}2. Check the 
center position and make sure 
under the size that you have your graphic 
image size in there.
3. then go to the 
repeat tab and check the 
repeat X, and 
repeat Y, and then your done, unless that is not all you are trying to do. But if you want more control of the texture go to under 
Blend by shader go and select 
create new shader/Colour shader/Distribution shader V4 02.  That will give you slope, height and so on, make sure you have that checked to have it work right.
  I think that should help you, and if you need other info on Texturing, I just finished a post that I needed help on a different kind of Texture problem and between the 2 you should be good to go now. /smiles.....