It works for me.
open blend file in Blender (I used 2.49b)
change to edit mode
under Texture Buttons (F6)--> Images --> Open Fileselect to load new image --> select the wall image
in the UV/Image Editor select the wall texture
File --> Export --> G3D XML Exporter Ver:1.1 (--> export warning )
opening in G3D viewer (v1.3.2 - Built: Jun 12 2005)
(I have the blend file and the texture in the same folder. If you still have a problem try to use "wall.tga" instead of "C:\Users\Admin\3DModels\wall.tga" as the path to the texture.)