The _hole_ material is for making exporters ignore certain faces (since you can't have "holes" in Wings meshes).
You are confusing a texture with a material.
Only those things listed in the Outliner that have the "M" in a box next to them are "Materials".
(The "M" stands for "Material"... go figure
You CANNOT simply drag a texture onto the selected faces.
The things with the little "checker" icons in the outliner are texture maps.
Texture maps must be assigned to a material (M in a box)
To create a new material
Clear all selections
R-click in the outliner and choose "Material..."
You'll get a pop-up that allows you to rename it (it defaults to "New Material"...I suggest naming it something descriptive)
This will appear in the Outliner with a "M" in a box next to it.
THEN, you need to drag a TEXTURE (little checker icon) onto the material within the outliner.
You will get a pop-up asking what "channel" to assign the texture to: Diffuse (aka color), Gloss (aka specular), Bump (HeightMap), or Bump (NormalMap).
Choose "Diffuse". (Diffuse is just fancy term for "color".) The reason it is called "diffuse" and not simply "color" is an explanation better left for another day
