Civ4 comes with "Atlas" textures that are textures with all of the other textures of a certain "set" included into one file (for example, there is one file with all unit textures, one for all tech textures, etc.). That's the file with "atlas" in the name.
Typically, we modders haven't been able to mod this atlas files. So, instead, when making buttons we put only the first part, which lists the path to the actual single button.
So, the entry in the XML would look like:
Art/Interface/Buttons/Units/HorseArcher.dds
The second file is the atlas file, and the bolded numbers are the placement in the grid of the files. For example, if you look at the atlas file, you'd see the horse archer in the grid if you went down 7 rows and over 7 columns (I don't remember if the first row is 0 or 1...)
But, since (last time I checked) your changes to the atlas file don't show up in the mod, it's pointless to put them in, and so you're better off just using the filename of the button and remove the atlas entry altogether.
@ ohcrapitsnico
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the gimp. Make sure when making changes to use "Save as" and save it as a .dds with DXT3.