Terrain texture modfies the relief with a pattern of "peaks and valleys".

Parameters :

Position : Position of the texture.

Scale : The texture is scaled by this value.  Use these parameters to scale or stretch the texture in one or more directions.

Spacing : This is the nominal spacing between features.

Smoothness : The relative smoothness of the texture application.  Low Smoothness stands the features out in higher relief.

Granularity : The "grittiness" or small feature density of the texture. 

Offset :  Offset controls how "weathered" the features appear.  Low Offset makes the features melt into the texture.

Notes : This texture can be stretched and distorted into a variety of appearances.  With the proper settings a nice "lava floe" texture can be achieved.