Hi.
First off make sure your texture pixel dimensions are a power of 2, ie 16x16, 32x64, 128x64 etc and that it's saved as 32 bit *.tga. If either of these are incorrect you get the green texture because WoW doesn't know how to read it.
.tga allows an alpha channel if you wanna go pr0.
Secondly there's no need to do all the funky bat business, simply open Weak Auras and click New -> Texture and in the texture path box type \\folder\filename.tga
I don't know how to describe it in proper computer terms but basically what it means is that \\ is like the root WoW folder and you can put the texture pretty much wherever you want to as long as it's in there somewhere.
As an example I have all my custom textures in a custom subfolder in \\Interface\ so that I can wipe my addon folder when it gets too messy and not lose my custom stuff.
My path when creating custom WA textures is
Code:
\\Interface\CustomUI\texture.tga
Also if you have OCD and want the textures to scale 1:1 make sure you uncheck "Allow full rotation" because it will shrink the texture.