Here is an example of how you might use the vertex alpha value to blend between two diffuse textures in the material editor.
This material handles the following:
Modulates diffuse color by the painted vertex color (RGB)
Blends between two separate diffuse textures (Diffuse, Diffuse2) using the blend weight stored in the vertex alpha channel (A)
Blends between two separate normal textures (Normal, Normal2) using the blend weight stored in the vertex alpha channel (A)
This is a pretty simple setup, and will allow for a user to choose between two blended textures (by painting alpha), and then to tint those textures by painting the vertex color. Here is an application in which the textures have been blended.
First, the material needs to be applied and the Mesh Paint tool needs to be set to Blend Weights mode, with a Texture count setting of 2.
Next, the user would begin by painting with alpha to designate where each texture will be placed. This is what the object looks like when viewed in Alpha mode:
Here is the result as seen without any view modes.
At this point, the user could then start painting on some colors like so (seen in RGB mode):
Which, when modulated with the blended textures, would appear like so: