this looks like a very promising tool to create landscapes. it´s called geofrac and is downloadable at
http://www.geofrac2000.com
the advantages over terragen is that you actually build your model in the viewport instead of only seeing the hight map. one disadvantage is that it doesn´t come with a renderer. that´s no proplem though since you can export as a rhino 3DM file and then convert import it into max incase you´ve got that max plug in which you will also find on that site. or you can directly export them into a terragen file.
here´s an example what some guy made with this tool. modelled in geofrac, rendered in terragen. very impressive:
GeoFrac (for people who like terragen)
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