Hey Rich,
I opened up that sample kit, and it's a mess. It clearly wasn't intended for an artist to just easily use out of the box. The OBJ material paths are hard coded to the wrong path so you can open up that .mtl file in a text editor like Notepad, or Notepad++ and manually edit the paths like this:
Old:
map_Ka S:\Textures\Kitbash\KB3D_SidewalkClean_Diffuse.jpg
map_Kd S:\Textures\Kitbash\KB3D_SidewalkClean_Diffuse.jpg
map_bump S:\Textures\Kitbash\KB3D_SidewalkClean_Normal.jpg
bump S:\Textures\Kitbash\KB3D_SidewalkClean_Normal.jpg
map_refl S:\Textures\Kitbash\KB3D_SidewalkClean_Rough.jpg
New:
map_Ka .\Textures\KB3D_SidewalkClean_Diffuse.jpg
map_Kd .\Textures\KB3D_SidewalkClean_Diffuse.jpg
map_bump .\Textures\KB3D_SidewalkClean_Normal.jpg
bump .\Textures\KB3D_SidewalkClean_Normal.jpg
map_refl .\Textures\KB3D_SidewalkClean_Rough.jpg
But like someone else said, the models are all jammed into one OBJ, FBX, .max (3DS Max), or .ma (Maya) file. I opened the Max file and it was using Vray materials!
Even after getting the texture paths fixed, loading in the OBJ/FBX/MAX file into Modo, and 3DS Max the materials were just all messed up (unusable).
So basically this is going to take a good amount of work to make useable in a program like Terragen.
Sorry for the bad news. I could pretty quickly separate all the models out into separate files for you, with just a basic gray material on everything if you need help. Just send me a PM.
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Derek