First off, get rid of 'six'es' tileset, and work or learn strictly from a Bioware tileset, with no addons from anyone else. This is necessary so that you get the FULL set of rules etc for a given tileset. And one that has proper path nodes etc...
The engine creates an area as defined by the size you choose 4x4, 8x8 12x16 or whatever size you chose. It starts painting from upper left to lower right and fills in as it goes. So first tile will always be a corner tile, with flat terrain or whatever you have chosen as the default terrain type. For outdoors this is typically grass, and typically a flat tile, type "A" pathnode.. It will continure across that top row filling in with the edge tile of that set. (Not actually the REAL edge tile, but whatever flat tile that the set has available, it will automatically rotate through any tile that meats the specifications for that position. This means top left is grass, top rioght is grass, bottom left if grass and bottom right is grass. The crossers will by default be set to nothing by default.
Now, the reason I had you work with a Bioware set verses anyone elses, is that 95% or more of the custom tilesets created by the community, don't bother with the actual rules section of the .set file. The rules help the engine to more quickly find a tile that matches, they sort the tiles into section according to the rules, IE all grass tiles will be together in ram, all sand tiles etc, as whatever terrains you have defined in the .set file. You need a set of rules for each terrain type that you tileset has. They have to be defined in a specific order as well. If you look closely at the bioware grass tileset.set file, and read through the rules, you can start to figure out how the rules work. Note that before you can create a rule that combines two different types of terrain, you must first define the primary rule for eacb of those terrains.... IE you need a single primary rule for grass, and one for sand, before you can create a rule that would alllow those two terrain types to meet. Rules drive me nuts as there are so many thiings you have to keep track of.
Now, a huge number of folks will tell you that the "rules" are not absolutely necessary, and those folks are right, the game WILL work without having the rules defined, it just won't work as quickly and as efficiently as it can work. The rules help the toolset to autochoose what tiles to paint when you drag say a crosser over several different terrains and/or heights in one swoop. IE click and drag a fence from one side of the area to the other, deliberately laying that fence across any streams, roads, or various terrains you may have.
The rules will allow the toolset to find the tiles it needs and paint them automatically. You can always force a tile to paint by continuing to click on the same position and the engine will rotate through all variatioins that fit, but that can take a while and the engine finds them randomly so you may end up with the same tile painting several times before the engine finds the variant you are looking for.
You may have also noticed while building, typeicallly with the click-drag across type of painting, that sometimes the cursor will turn red, and a tile won't paint for a specific location... this is either because A) there is no proper rule setup for that location, or
there is no tile that fits that location. The missing rule you can get around by just choosing to keep painting alternates down... the missing alternate tile, well that tile is just missing and you have to create it and add it to your .set file.
So, each tile has 4 possible sides that can match to a different or same terrain, AND 4 different crosser postions that also can match or not another tiles crosser settings. Each terrain type has a set of rules for all OTHER terrains that it might butt up against, AND for each crosser positions it might run across. That is why they drive me nuts... trying to remember all the possible combinations. Thrikreen was working on a program or some sort of util, batch file, script or something that would automatically tell you what tile names are reuiqred to get different terrains to work together... however I never heard anymore from him on that, so I have no idea whether or not he got it working.
If you have specific questions about a line in the .set, ask. Otherwise, you may want to browse the different tutorials from my signature as there are several regarding .set files, edge tiles, etc, spread out on the old CTP forums. Just because you think you have read them all, well, doesn't mean you were ready to absorb that information back then. Now that you have specific interest in a .set file etc, the data in those tutorials will have more meaning for you.