Blizz Art Tools Tutorial - Step 2 not working

I recently figured out (or thought I figured out) Step 2 of the tutorial (thanks to some help from BlinkBoy, as I was slightly confused with some areas of max). However, I'm not sure how to actually tell the Material Editor to assign the material/texture to the model itself. I tried dragging the "demo sphere with the texture on it" thing onto the model, but all that happens is the model turns white. The WarIII preview is also white and without texture. I don't know why this is.

I'm using max 5 by the way.

For those who might not be sure... the tutorial I'm using is Blizz's Art Tools one. It has the thing that looks like a blue pacman.


EDIT: Hmmm I think I figured it out.

It is white because I haven't mapped it yet (I think). The preview shows it as plain blue. It also works in the World Editor.

the elemental my dear Watsom.

select the material and drag it to your mesh.

I did, but the darn mesh turns white! The WCIII Preview shows it correctly, but I can't map it because it shows white in the viewport.

the second elemental; there is a lil box icon in the material editor that have blue and white patches, turn it on.