It sounds like *most* of what you want to do is data conversion/"massaging", rather than say adding detail or procedural textures, or rendering, all of which are more Terragen's strengths. "Simple" data conversion is better done with a dedicated app like Global Mapper, so I have to echo the recommendation of others here on that. Terragen just may not be the tool you need, or at least for this specific part of the workflow.
- Oshyan