Basic Terrain Creation
To create realistic terrain you first need a flat brush with the texture you would like to have on it. I have just used a simple grass texture as shown below.
Now choose which face you would like to edit and select it. I am using the top face in this example. Select the Texture Application tool (texapp.jpeg), click on the "Displacement" tab and then click on "Create". The dialog box show below will appear. Set the "Power" to 3 and click ok.
Click the "Paint Geometry" button. Doing this will bring up another dialog box shown below.
Don't bother changing any values. You will notice that when you hold your cursor over the camera view, you will see a half sphere. If you left click, the terrain under this will move up, and if you right click, it will move down. If you raise and lower the parts you want to, you will end up with something similar to this.
Experiment with the different settings until you get it how you like it.
Contributed by Cr4ig