That's a very nice image. As you're using Google Earth, you might also want to look at Google Sketch Pro (free full-featured trial lasts 8 hours). It can export models, although I haven't checked what formats yet. I've used the free version to create some simple models of my building at work and it's *very* easy to use.
My use of image overlays here was purely to check the alignment of the terrains though. After that, I use the images to create a variety of masks to use for the distribution of surfaces/populations. TG2 has made using image masks a lot more flexible so there are many new possibilities for creating better masks without using up too much RAM. I'll be exploring these more after I finalise my terrains for this project.