Now. Just to answer your questions, you can open up the .vmt with a text editor (like notepad), or with the VTFEdit (in the tutorial theres a link).
You must specify the location of each .vtf (the actual image) in the .vmt (the text file, because all hammer does is look for the .vmt
"VertexLitGeneric"
{
"$basetexture" "custom/example"
"$envmap" "env_cubemap"
"$surfaceprop" "metal"
}
So the example.vtf must be in your materials/custom folder (the .vmt points to the textures location relative to your materials folder).
If you've placed the textures into the wrong spot, then it will come up as purple and black checkers in Hammer. So read the tut, and you should understand how to do it better.
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