GeoPhil is correct you have to use specific colors for HOG to work right and they have to be exact rgb values - as close is not good enough. Grabbing the color off a thin line might get you rgb (1,255,255) which HOG won't see as a railroad which is rgb (0,255,255).
I've done exactly what you're trying to do it and it does works fine. I've also erased rail lines that I didn't want to be included in the route using pure white, rgb(255,255,255), which HOG sees as transparent but be careful to remove all trace as you can get "islands" like I describe below. I use CorelDraw/PhotoPaint but any good paint program that can save as uncompressed tga files should work fine.
The colors are set by MicroDem as the Tiger format doesn't support color data. HOG is set up to use the MD defaults. You can get the colors used by following the vector plots options on the MD options menu.
For example:
major roads - red rgb(255,0,0)
water 1 - blue rgb(0,0 255)
water 2 - dark blue rgb(0,0 128)
railroads - cyan rgb(0,255,255)
To draw rail lines set the pen color to rgb(0,255,255) and draw in the route. It helps to use seperate layers for the new work and merge with the backgound when done. You can also use this to add in additional baseboards that HOG would normally filter out since just drawing a small dot of cyan in any part of a baseboard is enough for HOG to include that baseboard in the map plus any surrounding baseboards based on the filter size. You have to be careful or you can get islands in space - baseboards seperated from the main map by open space of the Trainz universe - so make sure you don't leave any extra pixels colored cyan on the image where you don't want baseboards.
Bob Pearson