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A great source for how-to's is Home Depot or Lowe's. They have instructions at various times on a wide range of projects. I learned how to put in and finish hardwood floors and saved a ton of money. Check them out.

If it were my home and it were only one tread, I would tear it out and redo it. Mud and putty will eventually crack, particularly on stairs. I know my eye would go to that spot every time I used the stairs.

One quick cure that no one has mentioned is once the repairs are completed (whichever route you decide to take), is CAULK CAULK AND THEN CAULK some more. This is extremely important in keeping water from getting behind the shower walls and fixtures.