If I understand your answer, NASA Satellite DEMs are not heightfields! Terragen has decided so. And I'm supposed to believe that. Nasa, like the real Nasa, provides tif format.
"Terrain category" is at best useless, kind of another time waster, how? Go ahead import some heightfield images (tif...) to the library, and add them to the category terrain in the metadata tab. Done? ok, ready for the useless part? go to terrain tab in the main Terragen interface, click on Add Terrain, select from library. You get nothing, absolutely nothing, because "Add Terrain" "From Library" goes straight to Type heightfield, not to the category terrain.
So to import a heightfield, a proper NASA heightfield tif file (DEM), I still need to completely ignore the library and create my own library folder on the disc, because the library of Terragen is, for Terrains, utterly useless and the documentation says Terragen software decides on my behalf.
If Terragen software doesn't have a clue what NASA Satellite DEMs are, the user should be given the choice to classify imported images as TYPE heightfield.