A material in the Material Editor
House on left uses the default standard material.
House on right uses a compound material.
You use the Material Editor to design materials and maps to control the appearance of object surfaces.
You set basic material properties to control such surface characteristics as default color, shininess, and level of opacity. You can create realistic, single color materials using just the basic properties.
You extend the realism of materials by applying maps to control surface properties such as texture, bumpiness, opacity, and reflection. Most of the basic properties can be enhanced with a map. Any image file, such as one you might create in a paint program, can be used as a map based on parameters you set.
You can view the effect of materials on objects in a shaded viewport, but the display is just an approximation of the final effect. Import your work into your game to see the actual results.
See Designing Materials.