I have the material system in place, but have not tied it to the physics system which controls/detects what you are walking on. As we proceed with the CONKIT work, we will be connecting the material system to the triggering of the correct sounds. Entities will also be assigned a material index so the assets will know whether they are wood, metal, or some other material we support. There is no maximum number of materials supported, but we have reserved the first 20 or so for internal default materials. You can add your own, but it's a hack in the material list right now. If there is community support for importing new materials as part of the main software, then we can add that to the feature creep list.
PC SPECS: Windows 7 Ultimate 64-bit, Intel Core i7 920, NVIDIA Geforce 650GTX Ti Boost 2GB GPU, 6GB RAM