Just have a quick question regarding layered shader in the view port. Why do the textures come out very low rez?

That's just a preview. You'll need to do a test render to see what the output would properly look like.

AFAIK

You should use the layered textures, not the layered shader. Those will be updated on highquality viewport.

Can you add a spec and bump to each color map in a layered texture? Because the only way I know is via a layered shader

oh, you can, but it's not gonna show on viewport. I thought you only wanted diffuse. Brice did a CGFX shader that blends terrain via vertex color I believe, you might wanna check that out.

Are we talking Default Quality, High Quality or ViewPort 2.0?
If we are talking High Quality or 2.0 then there's settings where you can change things such as "Color texture resolution" (which is 256 by default).

Think this might be why you have a low res layered shader viewport result.

All three views don't display the color + alphas in real time. I have a Geforce GTX 580 so I would assume it should show up fine. I've attached an image of all three render views along with the network and a quick Maya software render.