Sorry for sounding like a complete plank here, but what exactly do you mean by 'material'?
Ah, sorry, little mix-up here... it's called 'surface' in Lightwave. Select the engine's faces in Lightwave, hit 'q' to create a new surface and name it "engine @boosters" or something like that. In the surface editor (F5) add your engine's texture to that surface and you're done in Lightwave. Now you only need a proper luminosity map for your engine's texture, which has the glowing parts colored white (or a shade of grey, depending on the intended intensity of the glow). These parts will now glow/flicker ingame, when the engine's active. They'll even match the engine's effect color, so you don't need to worry about that.
@jstubblesAh, now I've seen what you mean. Yeah, it seems Nexus tries to pull of some sort of default effect no matter what you have specified as impact effect. Since trying to overwrite any default particle effect in your mod's prt-files results in Nexus crashing (at least for me) I only see one solution: reduce the ImpactEfx size dramatically to make this combustion effect practically invisible, but at the same time increase the size of the actual effect in your efx.ini to compensate. For example, if you've got:
SHIPCLASS 10
...
ImpactEfx 50 1
...
SHIPCLASS
...
EFX 50
FLARE
Size 30
...
FLARE
EFX
then change that to:
SHIPCLASS 10
...
ImpactEfx 50 0.01
...
SHIPCLASS
...
EFX 50
FLARE
Size 3000
...
FLARE
EFX
The combustion effect should be way too small to be visible anymore, while your custom impact effect's size appears unchanged. Probably not a very elegant workaround, though, but whatever gets the job done, right?