I resized the horiz land terrain bitmap (well, a duplicate of it) to be twice as long as it normally is, because the terrain is perfect for what i have in mind, just not long enough, but now when I go to the scene editor, all the terrain turns red and has the word "default" all over it, and it liquifies when anything touches it.

How do i make it not do this?

I used MSPaint, if that matters.

It's because when you open it, and re-save it in paint, it saves it as a different type of bitmap. Instead of clicking save, click save as, and make it a 24-bit one.

You're supposed to save as 256-color aren't you?

Either you or MS Paint (Windows 7?) changed the colours or colour table, leading to CC not being able to recognize the colours as valid terrain colours.
Poor explanation, but I hope that made sense.

You can only use colours that are defined in the base.rte/materials.ini file, and the .bmp files must be in 'indexed colour' mode (8 bit) and must have the appropiate colour table.

Edit: The map's colour table should look like this:

(Can't be seen in MS Paint.)