For basic terrains, Terragen is quite scalable, it just may take longer render wise if you're doing crazy things. I am not sure if this is true with 0.9. But it is 32bit only so it can't be too overwhelming on 64bit systems with even relatively modern CPUs.
That being said, 0.9 may be easier to learn for 9/10 year olds, but Terragen Free has a lot more to offer including basic math functions which can be used to demo basic trig functions and how they effect terrain. In my opinion there is far more to teach from and demonstrate with Terragen 4 Free, or education licenses for your school computers provided by Planetside.
I don't really know what 0.9 has to really offer teaching wise. It's pretty rudimentary as a terrain generator. Though there were some cool plugins for it.
