By HDR lighting I mean I'm providing light to the scene by using a true real world HDR light probe image projected on the inside of a sphere that is larger than the scene and designated invisible, but visible to rays. The HDR image is feeding the luminosity function of the invisible sphere surface so luminous light of any desired strength can be given off by the sphere.
Though it is invisible, the outer lighting sphere still gives off light in linear proportion to the HDR image projected on it. Terragen's environmental GI responds to the luminosity, according to the direction of the light and does self shading of surfaces, but cast shadows don't get calculated for luminosity (as far as I know). This is why at least a minimal "regular" light source is needed to provide some level of cast shadows. I try to match up the direction of the most prominent light coming from the HDR image with the position of any regular Terragen light. Although the whole point of HDR light probes, especially taken from building interiors, is that they get complex, storing multitudes of light sources of various levels.
