As a beginer myself I would just choose a shader (maybe distance shader) and plug into your cloud network - see what happens. If its not what you expect, change the order or try a different input.
There are many different way to connect nodes and if its not logical you'll get a red line.
This should then give you an idea of the manner in which terragen is set out to work. I think there might be some individual node explainations on the wiki page.
