The sun isn't an actual object - it is a point distant light source. This is something many 3D programs use AFAIK (POV-Ray, BMRT and probably Blender).
In Terragen, it seems strange, because we are dealing with planets and would like the sun(s) to be actual objects.
So, I can understand that part, although I wish it were different. Maybe then, the sun would look better, if included in the image.
This "flying terrain" problem, also happens with a fractal terrain, although I haven't been able to find a point of view that would show it from afar. As soon as you change the planet radius to a smaller number, after you have added a fractal terrain, the camera goes underground.
Helen