the scriptable material system is all Ogre and just works in Aurora. You can save your meshes with seperate materials or have one single .material file for the entire thing. YOu have up to 99 UV channels and both GL and D3D support DDS compressed textures including DXTC 1,3,5
here's a simple single pass mask between 2 textures with an alpha example.
Simple texture transition
Supose you have three quads representing a ground plane. Quad A you want to be dirt, Quad B you want to be a combination of dirt and grass, and finally quad C is grass. Here is a simple material for Quad B that does not require external creation of a dirt/grass texture.
Material Requirements
source.png - Source texture

dest.png - Desination texture

alpha_blend.png - A image that has the alpha mask we want to borrow for the transition.

The Rule of blending image: The black (or color) area will be the source texture, and the transparent area will be destination texture
Material Template
material Template/texture_blend
{
technique
{
pass
{
texture_unit
{
texture source.png
}
texture_unit
{
texture alpha_blend.png
colour_op alpha_blend
}
texture_unit
{
texture dest.png
colour_op_ex blend_current_alpha src_texture src_current
}
}
}
}
The result

Best place to look at is the docs since there is so much of it.
Techniques:
Each material starts with a technique, which allows you to set up a series of materials that can apply to the same mesh.
A)fallback techniques that the engine uses when determining the features of your GPU.
B) LOD material techniques, like regular LOD for meshes, you set the LOD for a material with distance from camera, and depending on how distant the mesh is a unique material can be used, so you can switch from a fancy shader material up close to a simple texture in the distance.
Next you have Passes, Passes are kind of like a B3D Brush only with a lot more options. You can have as many passes as your hardware supports, and each pass can currently have up to 4 texture units which you can set all the usual diffuse, specular, ambient, and blendmodes etc. And each texture unit Bitmap layer also has a huge selection of blendmodes.
Here's your Pass blendmodes (like B3D brush blendmodes)
replace Replace all colour with texture with no adjustment.
add Add colour components together.
modulate Multiply colour components together.
alpha_blend Blend based on texture alpha.
Default: colour_op modulate
And Texture unit blendmodes:
source1 Use source1 without modification
source2 Use source2 without modification
modulate Multiply source1 and source2 together.
modulate_x2 Multiply source1 and source2 together, then by 2 (brightening).
modulate_x4 Multiply source1 and source2 together, then by 4 (brightening).
add Add source1 and source2 together.
add_signed Add source1 and source2 then subtract 0.5.
add_smooth Add source1 and source2, subtract the product
subtract Subtract source2 from source1
blend_diffuse_alpha Use interpolated alpha value from vertices to scale source1, then add source2 scaled by (1-alpha).
blend_texture_alpha As blend_diffuse_alpha but use alpha from texture
blend_current_alpha As blend_diffuse_alpha but use current alpha from previous stages (same as blend_diffuse_alpha for first layer)
blend_manual As blend_diffuse_alpha but use a constant manual alpha value specified in <manual>
dotproduct The dot product of source1 and source2
blend_diffuse_colour Use interpolated colour value from vertices to scale source1, then add source2 scaled by (1-colour).
Source1 and source2 options
src_current The colour as built up from previous stages.
src_texture The colour derived from the texture assigned to this layer.
src_diffuse The interpolated diffuse colour from the vertices (same as 'src_current' for first layer).
src_specular The interpolated specular colour from the vertices.
src_manual The manual colour specified at the end of the command
Anyway, here's the manual that covers Materials, there's a hell of a lot of it.
http://www.ogre3d.org/docs/manual/manual_14.html#SEC23To get a quick impression, I highly recommend looking at the images of the Ogre material editor in 3dsmax, which shows you a lot of the features in a relatively easy to read UI.
http://ofusion.inocentric.com/materials.html