I'm not sure if this is due to a bug in WWMT or an issue with the way I have my files set up, but all materials generated from the Material Library Generator have the .tga files pointed to the wrong path, setting the folder they're in as the root folder.
For example, I'm trying to use TF2's brick textures, so I extract the textures and convert them and then place them in the "Team Fortress 2\tf\materials" folder. Then I set the MatGen path in WWMT to "E:\Program Files (x86)\Steam\steamapps\common\Team Fortress 2\tf\materials\brick," which is the folder the brick textures are located. However, the .tga paths are wrong, so the Diffuse bitmap in the material "brickwall001" points to "\Brick\brickwall.tga" instead of "E:\Program Files (x86)\Steam\steamapps\common\Team Fortress 2\materials\brick\brickwall.tga." (Same goes for the Bump map.)
If further clarification is needed about the issue, feel free to ask. Hope this gets fixed (or I figure out what I'm doing wrong), as setting up material libraries manually is a huge pain.