Have you tried doing a "repair" of TFX, using it's configuration panel? Otherwise, I suggest following Holger's instructions for manually editing your terrain.cfg file. Make sure the entries are correctly numbered, and there are no duplicate entries, etc. Make sure the number on the "DefaultTextureCount=" line is correct.
Just to be clear, what sim are we talking about? FSX? FSX-SE?
We will get it working for you. Don't give up hope. Thousands of people are using TFX and Orbx with no problems. It's just a matter of getting the configurations correct.