OK. Here is a screenshot of something I just did. I think people here should be able to get this if I carry on with the Blender angle.
First, some changes were made. Instead of using the displace modifier, I deleted that. Then I opened a pane for nodes That's found on the menu at the bottom left of the windows. I clicked on the texture button then ticked Use Nodes. That actually dislocates our original texture from the material. It's still there in Blender but I built a new one using these nodes. In this case we lose the ability to see our terrain under Solid render mode. We have to choose rendered. However, you can see we have some pretty good visual feedback in the nodes if we don't want to keep realtime rendering. The nodes are supplying colour as well as displacement. This is where I'm going to next test the baking options in Blender Internal. I'm not sure these people are right about it being crap due to lack of anti-aliasing. If so, it could be post processed.
The nodes are two Musgrave mulifractals, one voronoi basis and one Blender original as you can see. Then one Cloud fractal voronoi crackle basis is added to one Musgrave after being divided to reduce the gain. This is then put through the curve graph to shape the gain. It's then mixed with the other gentler Musgrave using it's untreated original form to blend the two.
These are Blender Internal nodes. Cycles has a completely different set of nodes. there are some limits but I'm finding also some advantages with Cycles. The positioning is more powerful.
This terrain can be now be baked out at huge res. Fractal detail that you can't see will get baked. That's just a case of tweaking the fractal to get the detail and zooming into the realtime preview to see it, just as you'd do in Terragen.