I'm going to do the Terragen bit eventually but what I'll probably do is post on Blender forum to clear up all possibilities so the process is smooth. I nearly abandoned this due to some Blender regressions but I'm glad I kept going. The secret to the success is going to be Blender's new displacement. It means giant maps can be made and I know those fractals in Blender have masses of nice detail. It just needs capturing. I can kind of work blind on this because I'm used to using fractals and I think that's problematic for Blender users so you don't see too many scenes with very rich fractal detail. However, the Blender users will be able to help me use nodes.
The basic method is that you use Cycles to render the terrain displacement at final render time in full detail. Cycles does not have baking to UV. However, the workaround is in fact better than baking to UV because you've got more control of render features. What you do is set up a camera as ortho and position that to look at the terrain. That can be perfectly matched. You turn off the texture colour and replace with emission shader. You then render only the emission. you get a perfect rendering of the displacement forms. It's maybe not exact (height might be slightly different) but it's so close as to not matter.
This isn't without a few hitches. It's a cutting edge experimental feature of Cycles. The preview render looks different from the final. You have do a few low quality final renders just to check things are looking OK.
Also, I have to work out how to create nice fall off so the terrain edge is flat. Blender users may have some ideas on the best way to do that. I'd rather do it procedurally than paint in a fall off.
I honestly think that Blender is almost up with World Machine in usefulness for terrain. They would both work well together. They are different though. World machine is terrain specific so has fancy erosions and such like and it's easier to use for terrain generation since that's basically what it's for but because Blender has a really good node network and really good fractals, that opens up a lot of things.