Hi
Yes the fake stone shader is just as efflux said, to mask out the small stones from lying over the larger ones. You'll notice the surface colour value has been set to white. Your right efflux, I did pretty much stumble across this one although the more I work with terragen the more frequent the "hmm ... I wonder if that might work" gets me something at least interesting. If some thing works in one situation then its a good bet it'll work in a different one though the results can often be surprising!
Although I have forgotten most of my math (believe it or not I studied astrophysics for a while so I really should know most of this lol) a quick Google will get around most questions. My biggest stumbling block is the blend shaders and initial input on each shader. I'm used to photoshops layer blending, additive, difference, screen etc and of course your basic alpha mask, but I don't get terragens implementation of blend shader. Sometimes it works like a simple alpha mask, sometimes it seems to be additive, sometimes something else. I "think" this may be due to terragen using what I can only describe as hdri type colour values, black may be less than 0 and white may be more than 1 (or 255 for comparison). I think I must be a slow learner or have got hold of completely the wrong end of the stick

I dont find render times too bad to be honest. I'm not rendering to print yet, think I'll wait for the optimized version for that.
My general render settings are:
800 x 600
Detail 0.75
AA 3
GI 1 and 1 (thanks efflux)
Haze to 32 and Cloud to 128
On my system (E6600 OC'd to 3300Mhz, 3gig ram) I get a finished result in about an hour and get to know if its worth waiting for much quicker that that.
Happy rendering
Richard