On the 3D Arsenal install disc, there is a directory called "Presets installer." In that directory, run "LA_Surface Presets Installer.exe" and follow the screen instructions. I had to turn off both virus and spyware software to get the installer to run on my machine.
I did a custom install of 3D Arsenal, and had to move the presets to the correct location in lightwave. Also, when using the preset and it asks to locate an image file, point it to the 3D Arsenal image directory and select the image.