Aside from the already existing "Alpine Shader" in TG2, which is a sort of "procedural erosion", the only other actual "procedural erosion" that I'm aware of is created by Dmytry Lavrov, whose work I'm sure you're familiar with:
http://dmytry.pandromeda.com/mojoworld/erosion_fractal/home.html The important thing to be aware of both with the Alpine Fractal and Dmytry's approach is that - as far as I know - they are not doing "true" simulative erosion. They produce a similar visual effect with the "infinite detail" advantages of procedurals, but the very nature of iterative erosion simulation makes it essentially impossible to be done with procedurals. There are methods which can perhaps give the results you're looking for, but this is truly on the cutting edge of terrain rendering and to see it implemented in a commercial product within the year would be... "something special".
- Oshyan
