the passable parameters are limited to (as I know) TEXCOORD0-7, COLOR0-3 (not sure), and FOG (this depends on shader model used). maybe you could combine somehow the lights in the vertex shader into the 3 parameters you are passing.
Thanks for the reply Sivan!
I do not understand shaders. Don't even know where I can start.
You know let me know if there is any more Multitexture Shader terrain that support more lights?