load default.tgw then modify it (using the world maker to make terrain).
make sure you change the image size to 512 x 512 pixels.
check out the skysetting.doc and change the values in terragen
run the skybox2.tgs script.
go to c:/ and then change the files to .jpg
then put sky.bat with the pics and execute it.
you now have a skybox for your map.