Thanks for the reply.. I guess I kind of forgot about this post.. For a side/top down scroller your method would work. The issue we had was it's an ISO map, and we like being able to zoom in and out. Since we wanted to zoom out much further we came up with another solution.
I kind of tossed out the tile engine that was built in and coded my own. I didn't like several of the base features in the TMX handling. Mainly only being able to support a single tile atlas per layer. It just wouldn't work for our game, since we have single animations that take up an entire 1024 texture.
The other issue is the built in TMX code doesn't really handle the Z order very well on ISO maps. While you could use the VertexZ stuff, I found that our frame rates dropped significantly. Which we really didn't like. After the redesign we went from 20fps (2G) using VertexZ to my method which gave us 50fps (2G). Even the 3GS would drop to 40fps using VertexZ on a 60x60 map (we have 1000+ sprites that require proper Z ordering) with my code it runs at 60fps.
At some point down the road I might wrap up the code and submit it to the project, right now it's very generic and builds maps dynamically, and it requires some things to be done via code. In the future I'll probably fix it so it's a little easier for other people to work with.
Oh, and you can easily do what you want replacing tiles. Keep in mind though you will need to handle a few fundamental things, like animation and stuff outside of the tile sheet. Certainly though you could run through an infinite loop easy enough replacing tiles at a scrolling rate easy enough for a side/top down scroller.
Although you will have the same limitation imposed on all tile maps using TMX, one texture per layer.
Regards.