Textures not showing on models

[EricJ 759]

As per this topic:

http://forums.bistudio.com/showthread.php?170181-EricJ-Release-thread

I've had my models show up with no textures after applying them with O2. What happens is I see the textures fine on my PC, but even when PBO'd, the textures don't show in the game if I remove the folder from my P or O2 main folder. It should be noted that this is repeatable and quite frustrating. Is it because of the new tools? New patch issues?