When you want to reset all textures to be normal-size on a terrain, just select the polys & hit one of the alignment buttons in the settings window (the one where you set scale). I forget what it's called, something to the effect of "reset alignment", or "unalign" or something. That resets all selected textures to default size/alignment, no matter what kind of scaled brush you have.
Another thing to remember, when you import a terrain & scale it before adding it to the world, the builder brush keeps the scaled setting you entered. So when you enter 1024 x 1024 dimensions, you're going to get a brush that's 1024 x whatever scale you gave the terrain. So what you should do is select the builder brush, then select "reset all" in the contextual (right-click) menu. That will reset the scaling & any rotation you gave the brush.
When you do a bmp heightmap, if you do a 256x256, then import it as 32x32 in TerraEdit, you'll only get a small 32x32 portion of the 256x256 heightmap you made, so you're probably not getting the full terrain you were planning.
For Azteca I actually used a colored palette, actually using the standard Windows 8-bit. That was before I knew what I was doing lol... Now I always use greyscale palettes, much easier to visualize with!