Yes we "should" be able to do this and even better too, theres plenty to crit about the image in the link you posted (not to detract from the work though
)
BUT
This is exactly what I have been attempting most of this year and I have run into several problems. Firstly combining different types of terrain is not easy (for me at least). They either pile up on top of each other softening out their distinct features or make harsh boundaries between terrain types. I figure you could get away with five or six distinct terrain types but blending them together ... well its March now and I've been trying this since December. Now to the animation fly in. The problem here is one of scale. It would be easy to do an meteors eye view as it plummets to the earth but you'd only get at best a few seconds view of the terrain. I'd like to see a planet landing animation, fast as the ship approaches but slower as it flies over mountain ranges, slower still as it traverses canyons and finally coming to a stop/hover at its destination. Unfortunately for me since the internal animation controls in TG2 are underdeveloped at the moment I'm using Lightwave to animate in. Here the problem is that I cant see my planet and my ship at the same time and same scale. This makes it neigh on impossible to make a decent animation.
I think your right but its a LOT harder than I initially thought.
I'll post a few WIP's (links to vimeo) in a bit.
richard