sorry if this is late - I hope you're still reading this thread!
That smearing you're seeing is the result of changing one of the 2 scales of that texture. In the texture editing toolbox, if you select that texture, you should see two sliders, labelled 'u' and 'v'. Adjusting those sliders changes the scale of the texture in either the x or y direction. What has happened in your screenshot is that one of the axes is stretched much further than the other - moving the sliders so they match should sort out the problem.
Have a play with them to see precisely what they do as it's quite hard to explain using text
They are also found in other toolboxes - particularly the water edititing toolbox where they will allow you to create a wind direction effect. Also they can be handy in textures for sand and for sedimentary rock effects
edit: also, by sliding them together you effectively zoom in or out of the texture