Hi guys, this is a great topic and I'll try to chip in with a few tips and hope they might be a little useful.
Oshyan's tips on lighting and atmospherics are absolutely spot on, and also highlight a lot of the core strengths of the terragen renderer.
In most other 3d apps, depth and haze have almost always been achieved in post using the zdepth pass, this always frustrated me as it a very linear method of producing depth, and lacks realism as well as the lights relationship to the atmosphere.
The ability to layer atmospherics in terragen can produce far more realistic and natural results, it can even be used to simulate dust and random particulates in the air, so in that sense I often like to employ several isolated cloud layers to create different effects at different depths in my scenes.
It's also good to know the limits of your render engine and discover ways of circumventing the issues, for instance, the lack of shadow and colour detail in gi areas. Before the advent of better light simulation in apps like arnold and vray, we always used carefully placed bounce and fill lights to compensate, and while it can take some time, trial end error to get good results, it's still a very valid technique. I'd say that in most situations it's very tough to get away with simply one light and gi, and it's worth taking the time to experiment with lighting techniques, placement and even switches on the lights, ie using lights that only provide one or two forms of contribution like specularity/ diffuse/ atmospheric contribution. One thing we almost always employ in lighting is the use of our shaded spheres, 50% diffuse, fully reflective, and glossy etc as well as macbeth charts, these can be really helpful to have in your scene when lighting, as they allow you easily cross reference and check against any kind of reference plate, as to weather you are providing the right kind of values to your lights.
In terms of realism, shading is also crucial, and requires much study of your subject, how does the light react to the surface in terms of levels of reflectivity, glossiness and diffuse reaction to light, and how does it break up and scatter? going the extra few yards, say with road textures for example, to use maps that break up the specularity / reflections and diffuse contribution, can produce much more realistic results. Another tip here regarding textures, is that we almost always employ a linear workflow (which I'll avoid going into too much detail about here), terragen automatically converts your textures to linear space, which is great as it helps produce a more accurate response to the additional values of light, but you also have to look out for the colour saturation levels and not just the gamma. A lot of colour is reproduced by the addition of light, and more realism can be achieved by using slightly desaturated tonal values that work in conjunction with your light sources.
In all these situations, while trying to achieve specific realistic results, referencing your subject and type of image can't be underestimated, doesn't matter how experienced you are, without close study of relevant reference, it can be very hit and miss if you're looking for realism.
Richard makes a good point about bringing in maps such as AO to help create natural effects, and it's always worth exploring how we can create any kind of rule that lets us get into a specific part of a surface, I often use zbrush for it's multitude of different masking types, which are great for isolating different types of areas.
In terms of photoreal finishing, and matching plates in film, the end result is always done at the composting stage, where all the lens artifacts and specific attributes regarding the cameras used are matched as closely as possible. The matching of the camera types and lenses is very difficult to achieve in pure rendering terms and when looking for those types of results from your renders it is worth looking into how a lot of those effects are recreated at the post stage. Plenty of info out there.
Hope it helps, if just a little.
Chris
Also, +1 to everything Greg just said