That Archer Designs tutorial is quite old, though still useful. The main thing you need to know is just to use Heightfield (load DEM) from the Add Terrain menu in the Terrain layout. That supports all the GIS data formats that Terragen can load (including MOLA and lunar data). As far as I know Terragen's built-in real-world data support is better than Vue's, although they have improved it in recent years.
Note also that GeoTIFF as a format has little to do with quality, in fact it's one of the highest quality "DEM" formats you can get, supporting up to 32 bit data accuracy (the most you'll find). The quality of the data that gets stored in the format (i.e. the quality of the source material) is really the main determinant. This is most often expressed in terms of the resolution of the data in meters or "arc seconds", but even this can be an inaccurate measure if the data collection process is error-prone or otherwise problematic. The best thing to do is look for the highest resolution data and then load it up and see if it looks good to the eye.
"DEM" is also not a format, although .dem was used in some cases for older data; DEM just means Digital Elevation Map and was often used to refer to real-world data, though obviously the acronym's literal meaning doesn't restrict it to that. In practice "DEM" still refers to real-world data in most cases, but the formats used vary widely, from GeoTIFF (common) to ASCII to ArcGrid, BIN, BIL, and others. Terragen natively supports many of them, and can load any of the heightfield data from the USGS, which covers all of the US at high detail, and most of the world at lower detail.
- Oshyan