I'd like to start by saying thanks to Eluo's tutorial for pointing me in the right direction. His tutorial was useful but I didn't like the outcome of my highlights when night-time approached, so I did some experimenting of my own.
So we're going to start from scratch.
Step 1: Create your "_s" file[/u]
After making your custom texture the way that you want, save the file. Copy the file, and add "_s" to the end.
Step 2: Separate the grass from the dirt[/u]
If your texture has only grass on it, or only one texture type on it, you can skip to Step 3.Select your Magic Wand tool, set the Tolerance to around 10-20, make sure Anti-alias is checked.
Shift+Click some of the grass spots between until you get it all mostly selected.
Ctrl+C to copy, and Ctrl+V to paste onto a new layer. Afterwards, you can hide the old layer. You want it to look kind of bushy but not too clunky. Something like the image I have below. This could take some time to get it just right. I recommend feathering the edges a bit to make it a little smoother and less pixely.
Step 3: Adjusting the levels[/u]
Create a new layer under your initial layer, and fill it with black. This is just to give you a background to see what you're working with for the next few steps.
Select your initial layer and move over to the Channels tab where it shows the RBG. Select the RBG color that best corresponds to your main color. In my case I selected green because I'm working with grass. Ctrl+Click the little preview image right next to the color name, and Ctrl+C to copy.
Go back to the Layers tab, create a new layer, and Ctrl+V to paste the selection onto that new layer. You can delete the other layer.
Go to Image > Adjustments > Levels, and adjust the Input Levels to somewhere between 0.35 and 0.25 until you get something like this.
Move the original texture layer that you hid in Step 2 on top of the new layer, and Ctrl+Alt+G to create a clipping mask. You can hide or delete the Black background layer at this point.
Step 4: End Result[/u]
Select all layers, and Ctrl+E to merge them. Go to File > Save As, and save the file as a PNG.
Make sure that you save it as Interlaced for it to work as an alphamap.
Convert the files into blp, and put them in their respective folders. Now you should have some nice smooth highlights.
Daytime
Nighttime
