I can't for the life of me figure out how to work it...

I know you need a height map, and how to locate to the directory, I just don't know exactly what to do after that.

If someone could please explain I would be so grateful.

I don't know if you've done this already but if you read through the whole thread for tga2ter it is discussed pretty thouroughly. If you have a specific question not answered in it I can help you though.