I have used the free version of World Machine. The output from is loaded into Terragen 2 from the Terrain Tab. Use the height field load operator.
Basically, I set up my surface layers first. Rock for the steep hill parts. Then Sand, for the less steep areas. This surface layer gets smoothing, depends on what I have in mind. Last, the grasses surface layer.
Next I go to the rock surface layer and add a power fractal. This is for color variation. Almost always I use the same power fractal for the displacement. I keep the scales where they do not overwhelm the surface. Then just go down the various surface layers.
I set up a new surface layer for the fake stones. I tend to use the same colors as the rock surface layer.
After that, it's just tweaking with redirect shaders, strata shaders, more power fractals. The above will give you a nice start.
Major displacements should be done in the Terrain Tab. The principles are much the same.
