tobj - texture object, it defines what image to use (dds) and how to use it, in game. it might also tell the game to repeat the texture in U and V direction, or whether it's a normal map etc.
mat - material, tells the game what shader (effect) to use to render the object. it contains the type of shader (eut2. ....), a list of textures (if any are needed) and a list of parameters. guess you know that, already.
each shader uses a certain set of textures and accept a certain array of parameters. if you don't specify it, I think it uses a default value; if you add too many, it ignores them.
e.g specifying env_factor in a shader which doesn't have add.env is useless.
from my understanding:
diffuse - the amount of color (in RGB) the game will use from the base texture.
e.g. for a white base texture, if you put (1, 0, 0) the game will only use the Red channel of the image.
specular - some sort of "passive" reflection on the object.
increasing it will make the object look more... glossy; decreasing it - more matte
add_ambient (always 0, afaik, at least on stuff a mod maker uses) is the amount of ambient lighting reflected off your object, used on other objects (not sure, untested)
reflection (always 0, afaik) - whether the object is reflected or not, by other objects, like glass, or mirror like surfaces (not sure, untested)
env_factor - how reflective the object is. set it to 3 and you get almost perfect mirror.
shininess - some sort of gloss, but I'm not sure exactly how it influences the visuals
Retired, but still loving it.