DEM’s should come with some geographic references as to the where the corners fall in geographic space (usually decimal degress like 55.111N and -.6111 West.) This can help you when finding the appropriate texture map. Whenever you’re dealing with flat surfaces representing the earth, you’re going to have to deal with projection. So if you can source you bit maps from the same place as your dem’s you’ll save yourself some trouble.
A good place to start looking in 3dmapper.org for lots of links to imagery.
You should also check out the raster roam website under the dtep link for a good dem source. Let me know if you need instructions.
As for making your own texture maps, you might try the gradient method. Just make a linear gradient that looks like a cross section of the earth (from blue sea to white mountain tops) and apply it flat on the z axis of the dem. This has given me some surprisingly good results.
W