Found that option and yes its ticked. Your using Blender 2.6 right? Ive heard theres a different exporter for that version. It could possibly be the reason.
Anyway hopefully i can get this working how i want sooner or later.
EDIT: Ah i have figured out how to get the texture to automatically show. The only thing is it only shows when the code is left alone, what i mean by that is leaving it looking completely different to normal FH material codes.