It looks like GML might be largely a vector/point specification format. If that's the case the answer is no as Terragen does not yet support import of vector data of any kind. If you first rasterize the data, then you can certainly import it however.
If GML can store height or image data, then it may be supported. We'd have to have Jo Meder's input to be sure (he developed the GIS data support in Terragen).
- Oshyan