If you select a regular texture from the upper left picklist in your Landscape Editor dropdown menu, does a small thumbnail appear to the right? If so, your textures are loading and should otherwise work.
I may be all wrong, but is it possible you have the "Vertex Shading" feature active in the Landscape Editor dropdown box?
Check to see if the little box at the lower right "Edit Colors" is checked, and if so,
uncheck it, and then see if you can "paint" with the regular textures.
The Landscape Editing section if the Construction Set "Help" file is actually "helpful" for additional details.
Cheers
DARoot