Most of us just get an approximation of the landscape we want to represent. After the vegetation is added, most of the terrain is often covered. GIS data is hard to wait for the download to start, I find. World Machine will do much of this, but I have not taken the time to do much with it.
To do this properly in Terragen 2 would probably use many high resolution masks, which use memory. But it may be fun to explore this, when I have a more robust, faster, and RAM equipped computer.