Once you are satisfied with your PSP texture image...

In PSP click on Image/Resize and select 64x64, then "OK"

Now go to colors/Decrease color depth and select 256 colors (8 bit) and in the Decrease color depth box select Optimized Octree and Nearest Colors then click OK

Now in PSP just click the Copy button

now open up Traxx and click the paste single texture button, you will then be prompted to enter a name for the newly created texture, this is very important to name it something very unique, preferably 8 characters long so it will not conflict with other textures in other tracks,  now just click OK and Traxx will automatically create the necessary .Act and .Raw image files and save them to your  "Art" folder ...

that's it, your new texture should be loaded and ready to use, all that's left is to select the "Type" and "Grip Depth" and put it in place on the terrain