This is where you either....connect the whole pyramid of merges as a child to a surface layer with no restrictions.....then you can use Distribution shader for altitude and slope as fake stone mask, keeping in mind that the stones merged in one merge shader should be distributed to same altitude and slope.
If each stone is a different color and displacement, you need to disconnect the upper texture and color adjust nodes, (this is where your color and displace should then be connected to each stone respectively as stone surface shader)
Geek at Play has a tutorial on YouTube about using compute terrain, written for TG3, I think.
There is another link, old, by chronor, where fleetwood demonstrates distribution, This is in Terragen Support:
http://www.planetside.co.uk/forums/index.php/topic,14811.0.htmlIf Tangled Universe or any like artists have an explanation of stone distribution, I have not found it yet.
Edit afterthought....and then there is the painted shader, haha...many ways...