1 In general
The mentioned detail texture is likely used for terrain polygons and will work, if the checkbox "Alpha controlled detail texture" is unchecked. If the box is checked, take a look at the functionality in: Material-Eigenschaften - Detail-Textur.
2 The effect in detail
2.1 Functionality
The usage of a detail texture means, that beside the standard texture a second texture will be used. The second texture will be repeated a lot more often, than the standard texture, so there will be more details displayed on the whole thing. Let's imagine: A big grass texture gets repeated every 40 meters with a detail texture, that gets repeated every 2 meters.
When the detail texture has a size of 256 x 256 pixels, every pixel is about 8 mm big. The upcomming repetition of this texture would be odd looking, but if the same pixel size should be mapped on a 40 meter polygon with a single texture, this texture would be above 5000 x 5000 pixels.
2.2 Mix it up
Simple maths: The color of the standard texture and the detail texture gets added together and the "HTML Gray" color will get substracted from this value. Of course the color can't get darker as black. 
This method delivers best, if one texture has a color and the other texture is mostly gray. It's not set which texture brings in the color, so there are textures like "asphalt_1.bmp", that has the HTML Gray value and is applicable to a big amount of detail textures, which may have different colors. Some other detail texture like "asphalt1_detail.bmp" (dark gray) or "platten1.bmp" (light gray) are a little bit special.
Vice versa - as we did in our grass texture - the detail texture can be "the gray one" and the standard texture defines the color.
The gray texture can also have some color on it to set some small details, so the whole polygon won't look all the same.
The outcome of the texture, if both textures differ heavily to gray, may look strange.
3 Material settings
- Scaling of the detail texture: Describes the ratio between the standard texture and the normal texture. The value "10" means, that the detail texture fits 10 times into the standard texture.
- Detail texture: This texture delivers the effect mentioned in this article.
