3D level texturing

They usually have some graphical level editor. Either made by programmers for the particular game, or purchased together with the engine (if they are using a commercial engine with an editor). Two examples of such editors:
Valve Hammer Editor (Source games - HL2, TF2, Portal etc.): http://en.wikipedia....e_Hammer_Editor
UnrealEd (Unreal Engine): http://en.wikipedia.org/wiki/UnrealEd

You can also use a 3D modelling/animating/visualisation system like Blender, 3ds max, Maya. That allows you to make your 3D models (including level geometry) and apply textures there. Your game engine then just imports the models and renders them.
Btw, these modellers are usually needed even when using the level editors, because level editors are mostly for putting everything together and making some simple geometry (walls etc.), but to make a nice complicated 3D model of some characters or any props, you need something like 3ds max.

Ok thx. anyway, I have a limited skill in texture mapping a huge world. Care to share some tips or tuts?

Maybe I misuderstood the first post - did you mean just texturing the ground?

nope I mean texturing everything, ground, roads, sidewalks, because it seems like a daunting task when workin on a large city mesh...

nope I mean texturing everything, ground, roads, sidewalks, because it seems like a daunting task when workin on a large city mesh...

Modelling and texturing are two processes closely tied together. Making (modelling & texturing it) a city mesh is a daunting task, not just texturing it

Usually, you aren't going to do it all at once --at least from what I've seen. You'd develop the city in smaller pieces, then assemble these smaller pieces in a map editor, then, the map editor will export the entire map as an optimized scene where the geometry and materials are organized for efficient rendering by using an algorithm. There's different types of sorting algorithms out there. I wrote an octree algorithm, and my map editor uses it. It's still in the beginning stages, and does not allow for any animated scenery at the moment, but you can place animated objects in places.

Another thing you should consider is lighting. Are you going to use dynamic lighting? Also, how will you manage that? Will this be with shaders, or are you working under a fixed-function pipeline with your rendering API? Lighting is also related to texturing even more so than maybe 6 years ago when programmable GPUs weren't common, and it was favorable to fake lighting for levels (not for dynamic elements like characters though).