In general green texture (whenever) means that there was some error while trying to draw it on model. In most of causes it means that some texture file was simply not found. There are some textures in patches which can be drawed on terrain by noggit, but they don't work ingame. I am not entirely sure why, but I think that they lack reflect textures (xyz_s.blp for xyz.blp terrain texture). Try to use different dirt texture instead of the one you have used.
About needing to erase some textres, you may either use ctrl+alt+shift+click to delete all textures from targeted chunk or you can use texture swapper included in texture painting tool to switch unused textures on chunk/ADT for textures you want to use.