Using the toolkit to generate a random terrain, I have used the Fractal terrain generator function with a Delta of 0.4 and Blend of 0.445. This will generate a nice-looking terrain with a good proportion of hills and valleys. Since the terrain is randomly generated, yours may not look exactly like mine, but it should look something similar to the following screenshot:
I usually apply the Smooth filter after my terrain generation to make things look even nicer.
You will see the difference the filter makes once it has been applied. Let's go ahead and now apply some textures to make it nice. Selecting the Texture tab ...