TS2010 SP2 and beyond does not read the custom folder any longer. If you search the forum for displacement maps threads you will find a post by me that gives details instructions on adding displacement maps as an assets using CCP.
 
William
		
		
	 
 
 
Here is the text to the post, which I saved to a text file. 
 
 
Hi Dave,
Thanks for the good info on creating displacement maps. With regard to TS2009 and displacement map here is something I posted in another thread about them. 
TS2009 SP2 does not read the World/Custom folder and add content there to the Trainz Asset Database at startup anymore like older versions. This is a part of a move away from having assets outside of the TAD. There is now a new asset kind "GroundBrush" for creating displacement maps available in CCP.
Choose New from the file menu in CM2 and a new asset will be created and opened for edit in CCP. Choose GroundBrush as the type. Fill in the fields for the config.txt. Here are mine:
kuid <kuid:xxxxxx:1044> This will be created for you.
username "Displacement Map 2" Choose your own name here.
trainz-build 2.9
category-class "JO"
category-region "US"
category-era "2000s;2010s"
kind "groundbrush"
displacement-bitmap "f_001.BMP"
Before you can choose your bitmap at the bottom you must copy your image to the folder that is open in your TS2009 folder's Editing folder. This should be called New Asset at the moment. Now you can choose the image in the requester. Save the config and exit CCP. Now commit your new asset and your displacement map will show up in surveyor. Beside using it with the fill button, you can also choose a displacement map and then use the height up and down tools with the displacement map effecting how they change the terrain.
By the way, the bitmaps don't have to be 256 x 256. They can be up to 2048 x 2048 which is quite useful on a 5m grid. They can also be jpeg files too. 
And yes you can now upload them to the DLS.
William
Clearing Glassy edge...
Hi BigThing
For the config, no. However any building that uses alpha blending can, in theory, have a line added to the .texture.txt file of those textures to force them to have 'masked' alpha channels. 
The line is:
AlphaHint=masked
You will need to test on a 'per building' basis, as not all alpha channels will work well when masked automatically.
In native mode this can also be used to remove the 'glassy edge' effect (since masked alpha channels can be used in native mode).